Kolkata: Private-lender Bandhan Bank on Friday said the Reserve Bank of India (RBI) has withdrawn its general permission to open new branches and frozen the remuneration of the lender’s MD and CEO Chandra Shekhar Ghosh till further notice as it failed to comply with a licensing condition.
“RBI has communicated to us that since the Bank was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 per cent, as required under the licensing condition, general permission to open new branches stands withdrawn and the Bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further notice,” it said in a regulatory filing.
The Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 per cent and shall continue to engage with the RBI in this regard, it added.
According to RBI’s new banking licensing norms, any bank offering “universal” services will have to bring down the promoter holding to 40 per cent in three years from the date of commencement of business.
Kolkata-based Bandhan Bank, which was the first instance in the country of a microfinance entity transforming in to a universal bank, completed three years of operations this August.
Bandhan Financial Holdings Ltd (BFHL), the promoting entity of Bandhan Bank, is owned by Bandhan Financial Services Ltd (BFSL). The promoter holding in the bank currently stands at around 82 per cent after a successful Initial Public Offer (IPO) launched in March this year.
Before IPO, the promoter holding in the bank was nearly 89 per cent.
Significantly, the capital market regulator Securities and Exchange Board of India’s rules mandate one year’s lock-in period for promoter holding after an IPO.
Ghosh was unavailable to comment on the RBI restrictions. Sources in the bank, however, said the restrictions imposed on the new branch expansion “will not impact its present operation”.
According to information available in the bank’s website, it has 937 branches and 2,764 doorstep service centres.
–IANS
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