The Reserve Bank of India (RBI) has barred the Bandhan bank from opening up of new branches, for non-compliance of the licensing conditions. It has further ordered the freezing of Bandhan bank's CEO salary. It has been reported that the Bandhan bank has failed to comply with the shareholding rules, a part of the licensing condition of the RBI. After the mounting non-performing assets (NPAs) threatened India's banking sector, especially public-sector banks, the RBI has brought all the banks under close scrutiny.
Bandhan bank via a statement, has responded that "The Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of Non-Operative Financial Holding Company (NOFHC) in the Bank to 40 percent and shall continue to engage with RBI in this behalf.” The Bandhan bank, Headquartered in Kolkata (west-Bengal), currently has 937 branches in parts of the country. The bank has come into existence in the year 2015. And it became an A-Listed company in March 2018. It has started as a micro-finance company in 2001 and was given the banking license by the reserve bank of India, in the year 2014.
Under the new guidelines issued by the Reserve Bank of India in the year 2013, all the newly started banks have to achieve the public listing of shares and to bring down the promoter shareholding to 40% within three years of the operational date of business. The Bandhan bank has reportedly failed to comply with this requirement. The Bandhan bank has in a statement to the Bombay Stock Exchange (BSE) said that “RBI has communicated to us that since the Bank was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 percent as required under the licensing condition, general permission to open new branches stands withdrawn and the Bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further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. ”
Tags : #RBI #BandhanBank #No #NewBranches #Compliance