The Reserve Bank of India (RBI) has barred Bandhan Bank from launching new branches. Moreover, this is a result of failing to reduce its main shareholder’s stake to less than 40%.
At the same time, the central bank also froze bank CEO Chandra Shekhar Ghosh’s salary.
Measures need to be taken
The bank currently has 937 branches across India. Also, its promoter Bandhan Financial owns a stake of 82.28% in the bank.
However, as per RBI’s mandate, the promoter of Bandhan Bank is required to reduce its holding to 40%. In addition, this must be achieved within three years of starting operations.
In response, Bandhan Bank has assured that it is taking measures to meet the conditions on shareholding.
“The Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 percent and shall continue to engage with RBI in this behalf,” it said in a regulatory filing.
Kolkata-based Bandhan Bank began as a micro-finance firm and secured in-principle nod from the RBI to launch a universal bank in 2014. It launched banking operations in August 2015 with 501 branches, 2,022 service centres and 50 ATMs.