RBI bars Bandhan Bank from opening new branches, freezes CEO's salary for not meeting licensing conditions

Bandhan Bank said 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 percent

Press Trust of India September 28, 2018 17:37:51 IST
RBI bars Bandhan Bank from opening new branches, freezes CEO's salary for not meeting licensing conditions

Mumbai: The Reserve Bank has restrained Bandhan Bank from opening new branches and also ordered the freezing of remuneration of its CEO Chandra Shekhar Ghosh for not meeting the licensing conditions, the newly-launched bank said Friday.

The bank, on its part, said 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 percent.

RBI bars Bandhan Bank from opening new branches freezes CEOs salary for not meeting licensing conditions

Representational image. Reuters.

"RBI has communicated to us that since the bank was not able to bring down the shareholding of NOFHC to 40 percent...general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further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 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 percent and shall continue to engage with RBI in this behalf," Bandhan Bank said.

As per the bank's website, it has 937 branches in parts of the country. The Bandhan, an MFI, was given conditional approval by the RBI for setting up a universal bank in April 2014.

Headquartered in Kolkata, Bandhan, which started as a micro-finance company in 2001, received banking licence by Reserve Bank of India in 2014.

Besides Bandhan, the RBI had also given the banking licence to IDFC.

Bank's shares closed at Rs 565 apiece on BSE, down 0.78 percent.

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