MUMBAI : The Reserve Bank of India (RBI) on Tuesday imposed a penalty of ?1 crore on Bandhan Bank Ltd for failing to meet its promoter holding norms.
“The Reserve Bank of India (RBI) has, by an order dated October 29, 2019, imposed a monetary penalty of ?1 crore on Bandhan Bank Ltd for non-compliance with the guidelines on promoter holding contained in ‘Guidelines for Licensing of New Banks in Private Sector’ dated February 22, 2013 (licensing
guidelines) read with the conditions imposed by RBI in exercise of powers under Section- 22 of the Banking Regulation Act, 1949 (the Act) at the time of issuing banking licence to the bank,” RBI said in a statement.
The regulator said that the bank was required to bring down the shareholding of its non-operative financial holding company in the bank in excess of 40% of the total paid-up equity capital to
40% within three years from the date of commencement of business of the bank. However, as the bank failed to comply with the said licensing guidelines, a notice (SCN) was issued to the bank advising it to show cause 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, RBI came to the conclusion that the bank had failed to comply with the licensing guidelines read with the licensing conditions imposed by RBI and decided to impose monetary penalty on the bank,” it said.
According to RBI’s new bank licensing guidelines, the bank’s promoter, Bandhan Financial Holdings Ltd, had to cut its stake from 82% to 40% within three years of commencing business. The deadline for Bandhan Bank was in August 2018.
The Kolkata-based bank in January 2019 announced the acquisition of Gruh Finance Ltd, the affordable housing finance arm of Housing Development Finance Corp. (HDFC), in a share swap deal. The acquisition is expected to lower promoter holding of Bandhan Financial Holdings in the bank to 61% from 82.26% at present.
News Source:- livemint