Mumbai: The Reserve bank of India on Tuesday lifted the restrictions placed on Bandhan Bank, allowing it to open new branches without prior permission. In a notice to the stock exchanges, the private sector lender said that 25% of the new banking outlets should be opened in unbanked rural centres.
“Further to our letter dated September 28, 2018, we would like to inform that the Reserve Bank of India vide its letter dated February 25, 2020 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 atleast 25 % of the total number of ‘Banking Outlets’ opened during a financial year are opened in unbanked rural centres,” the bank said in a notification to BSE.
In September 2018, RBI barred the bank from opening new branches without its approval and ordered the bank to freeze the salary of its chief executive Chandra Shekhar Ghosh over its failure to meet shareholding rules.
According to RBI’s new bank licensing guidelines, the bank’s promoter, Bandhan Financial Holdings Ltd, has to reduce its stake from 82% to 40% within three years of commencing the business. The deadline for Bandhan Bank was on 23 August. The bank has assured that it was taking necessary steps to comply with the licence condition on shareholding.
Earlier this month, RBI agreed to give billionaire Uday Kotak more time to cut his stake in Kotak Mahindra Bank even as the regulator decided to cap his voting rights, ending a long dispute over promoter shareholding.
As part of the agreement, Uday Kotak will now have to cut his stake in Kotak Mahindra Bank by only 4% over the next six months, against the 15% that the regulator wanted him to reduce by March, but the Reserve Bank will cap his voting rights—first at 20% till 31 March, which will then drop overnight to 15% even if his actual shareholding is higher. The banking regulator has also added clauses to the agreement to ensure Kotak adheres to the formula.