Bandhan Bank shares jump 7% as RBI approves branch expansion1 min read . Updated: 13 Dec 2018, 10:54 AM IST
Bandhan Bank shares advance over 7% after the Kolkata-based bank said it will open 40 more branches by December 31
New Delhi: Bandhan Bank shares advanced as much as 7.46% to ₹ 508.70 per share after the Kolkata-based bank said it will open 40 more branches by December 31, taking the total number of Bandhan Bank branches to 978. “The bank had received prior approval from the RBI for opening the new branches," CEO Chandra Shekhar Ghosh told PTI. At 10.05am, the Bandhan Bank stock was up 5.05% at ₹ 497.25 per share on BSE, while the benchmark Sensex Index rose 0.7% to 36,026.25 points.
The Reserve Bank of India had in September barred the bank from opening new branches without its approval and ordered the bank to freeze the salary of its chief executive over its failure to bring down promoters’ stake to 40% from close to 82%, within the stipulated deadline.
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.
“We are working on the process of stake dilution of the promoting company in the bank," PTI quoted Ghosh as saying.