KOLKATA headquartered Bandhan Bank says it remains pledged to implement the Reserve Bank of India’s directive after the RBI has stopped Bandhan Bank from opening branches freely and frozen the compensation to CEO and founder Chandra Shekhar Ghosh at existing levels as penalty for not reducing promoter stake to 40 per cent by August this year. The bank intimated exchanges on Friday evening that RBI has withdrawn the general permission available to open branches. The bank can still open branches but only with prior permission of the regulator. The Reserve Bank of India (RBI) has restrained Bandhan Bank from opening new branches and also ordered freezing of remuneration of its CEO Chandra Shekhar Ghosh for not meeting the licensing conditions, the private banker bank said Friday.The bank it is taking steps to comply with licensing condition to bring down the shareholding of non operative financial holding company (NOFHC) in the bank to 40 per cent. “RBI has communicated to us that since the bank was not able to bring down the shareholding of NOFHC to 40 per cent… general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the bank stands frozen at the existing level, till further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 filing to stock exchanges.”The bank said it is taking steps to comply with licensing condition to bring down the shareholding of NOFHC in the bank to 40 per cent and shall continue to engage with RBI in this behalf,” Bandhan Bank said.According to the bank’s website, it has 937 branches in parts of the country. Bandhan, an MFI, was given conditional approval by the RBI for setting up a universal bank in April 2014. The bank became operational in 2015.Headquartered in Kolkata, Bandhan, which started as a micro-finance company in 2001, received banking licence by RBI in 2014.Besides Bandhan, the RBI had also given the banking licence to IDFC.The bank’s shares closed at Rs 565 apiece on BSE, down 0.78 per cent. Bandhan Bank, which completed three years of operations on Thursday, is still awaiting feedback from the Reserve Bank of India (RBI) on its request for an extension of deadline to meet the promoter shareholding norms.“We are awaiting the RBI’s guidelines on meeting shareholding norms,” Chandra Shekhar Ghosh, managing director and chief executive officer, told reporters on the sidelines of the third anniversary celebration function of the bank in Kolkata on Thursday.While the Securities and Exchange Board of India’s (Sebi’s) rules call for a year’s lock-in period for promoter holding after listing, the RBI’s norms require promoters’ stake to be brought down to 40 per cent within three years of the launch of operations of a bank.Bandhan Bank went for an initial public offering (IPO) in March this year, which, sources said, constrains the bank from reducing promoters’ shareholding. After the IPO, promoters’ holding in Bandhan Bank came down to 82.28 per cent, from 89.62 per cent.
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