Mumbai: Bandhan Bank will soon submit its plan to bring down its promoter holding to comply with the Reserve Bank of India’s (RBI) directions, Chandra Shekhar Ghosh, the managing director and chief executive officer of the bank, said on Wednesday.
“The option available to us is an offer for sale (OFS), where the non-operative financial holding company (NOFHC) dilutes; do a merger and acquisition and depending upon business requirement, we can look at primary or secondary fund raising. These are the three options available and we will evaluate." Ghosh added.
Asked about the bank’s progress in bringing down the promoter shareholding to 40%, Ghosh said the bank is “continuously engaging with the RBI and have a plan which we will submit to the RBI". “The issue has come up just a few days back and I will request you to give us some more time."
Last month, the Reserve Bank of India had barred Bandhan Bank from opening new branches without its approval and had ordered it to freeze Ghosh’s salary over its failure to meet shareholding rules.
“RBI has communicated to us that since the bank was not able to bring down the shareholding of non operative financial holding company to 40%, as required under the licensing condition, general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI and the remuneration of the MD and CEO of the bank stands frozen at the existing level, till further notice," the bank had said in a notification to the BSE.
According to RBI’s new licencing guidelines, the bank’s promoter, Bandhan Financial Holdings Ltd, has to reduce its stake from 82% to 40% within three years of commencing the business. Thereafter, banks are required to reduce their shareholding to 20% and 15% within 10 years and 12 years, respectively. Bandhan Bank’s deadline ended on 23 August.