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
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.
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was not able to bring down the shareholding of NOFHC to 40 percent...general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further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.
also read
Credit Suisse crisis: Does India have reasons to worry?
There is more panic in the banking world, as Credit Suisse shares plummeted on Wednesday. The global investment institution has a presence in India with assets worth Rs 20,000 crore. Will the bank’s future impact the world’s fastest-growing economy?
Rupee closer to replacing dollar as 18 nations agree to trade in INR
The process of SRVAs started last year in the month of July when the RBI issued detailed guidelines on cross-border trade transactions in the Indian rupees (INR)
US Federal Reserve hikes interest rate amid banking turmoil: Does this affect American credit card spending, home loans?
The US Federal Reserve raised its benchmark interest rate by a quarter point. The ninth consecutive increase in a year was made despite fears that it could add to financial turmoil after a string of bank failures. Here’s a look at how the hike will affect finances — from credit cards to car loans