Bandhan Bank fined Rs 1 cr for not bringing promoter shareholding down within stipulated time
The Kolkata-headquartered Bandhan Bank had a net income of Rs 488 crore in the year-ago period
The RBI said a show-cause notice was issued to the bank as to why penalty should not be imposed for non-compliance with the said licensing guidelines
The bank has reported a consolidated net profit of Rs 972 crore for the September quarter, which includes the numbers of Gruh Finance, and outlined affordable housing loans as its focus area going forward
The Kolkata-headquartered lender had a net income of Rs 488 crore in the year-ago period
Mumbai: The Reserve Bank of India (RBI) has slapped a fine of Rs 1 crore on private sector Bandhan Bank for non-compliance of its guidelines on promoter holding requirement.
The RBI has, by an order on Thursday, imposed a monetary penalty of Rs 1 crore on Bandhan Bank for non-compliance with the guidelines on promoter holding contained in 'Guidelines for Licensing of New Banks in Private Sector', the central bank said in a release.
This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Act, taking into account the default committed by the bank in complying with the aforesaid licensing guidelines and conditions, it said.
"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank," the RBI said further.
As per the required guidelines, the bank was required to bring down the shareholding of its non-operative financial holding company in the bank in excess of 40 percent of the total paid-up equity capital to 40 percent within three years from the date of commencement of business of the bank.
However, the bank failed to comply with the said licensing guidelines.
The RBI said a show-cause notice was issued to the bank as to why penalty should not be imposed for non-compliance with the said licensing guidelines.
After considering the reply received from the bank, submissions made by the bank during the personal hearing and the documents submitted by it, the RBI came to the conclusion that the bank had failed to comply with the licensing guidelines read with the licensing conditions imposed by the RBI and decided to impose monetary penalty on the bank, the regulator said.
Earlier last week while announcing the second-quarter earnings of the bank, its Managing Director and Chief Executive Officer C S Ghosh did not reply to a question on by when and how would he meet the RBI's requirement to get the stake down to 40 percent, because of which the bank is under restrictions including branch expansion.
The bank has reported a consolidated net profit of Rs 972 crore for the September quarter, which includes the numbers of Gruh Finance, and outlined affordable housing loans as its focus area going forward.
The Kolkata-headquartered lender had a net income of Rs 488 crore in the year-ago period. However, the numbers are not comparable as Gruh was not merged with it then.
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