Bandhan Bank receives breather from RBI on promoter holding dilution

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Published: February 26, 2020 2:30:46 AM

andhan Financial Holdings, which is the promoter of Bandhan Bank, currently holds around 61% stake in the bank.

bandhan bank, banking sectorThere is a three-layered structure for Bandhan Bank.

Providing a breather to private sector lender Bandhan Bank, the Reserve Bank of India (RBI) has lifted the regulatory restriction on its branch opening, subject to the some conditions, although the bank is still not in compliance with the licensing condition on dilution of promoter holding.

The bank, in a stock exchange filing, said, “…we would like to inform that the RBI vide its letter dated February 25 has informed that though the bank is still not in compliance with the licensing condition on dilution, considering the efforts made by the bank to comply with the said licensing condition, it has lifted the regulatory restriction on branch opening, subject to the condition that the bank ensures that at least 25 % of the total number of ‘Banking Outlets’ opened during a financial year are opened in unbanked rural centres.”

Coming down heavily on the Kolkata-based lender for not being able to bring down the promoter holding to 40% in three years’ time, the RBI had in September, 2018 barred the bank from opening new branches and also frozen the remuneration of its MD and CEO Chandra Shekhar Ghosh at the existing level till further notice.

There is a three-layered structure for Bandhan Bank. Bandhan Financial Services is the holding company of Bandhan Financial Holdings (non operative financial holding company) which is the holding company of the Bandhan Bank. Bandhan Financial Holdings, which is the promoter of Bandhan Bank, currently holds around 61% stake in the bank.

According to RBI’s new banking licensing norms, any bank offering ‘universal’ services will have to bring down the promoter holding to 40% in three years from the date of commencement of business.

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