Bandhan Bank says RBI lifts restrictions on remuneration of its MD & CEO2 min read . Updated: 17 Aug 2020, 05:50 PM IST
- The curbs were lifted after the bank met RBI's norms on promoter stake
- Bandhan Bank's holding company BFHL on 3 August sold 20.95% stake worth over ₹10,550 cr as part of complying with regulatory requirements
New Delhi: Bandhan Bank on Monday said RBI lifted restrictions on remuneration of the bank's MD & CEO Chandra Shekhar Ghosh.
The curbs were lifted after the bank met Reserve Bank of India's norms on promoter stake.
Earlier this month, Bandhan Bank's promoter sold stake to bring down shareholding to 40%.
Ghosh's remuneration was frozen, at the existing level, since September 2018.
"The RBI vide its letter dated September 19, 2018 imposed two restrictions on the Bank: (i) Prior approval of RBI was required for opening of banking outlets, (ii) the remuneration of the MD & CEO of the Bank stands frozen, at the existing level.
"Considering the progress of the dilution of excess shareholding of NOHFC in the Bank, RBI vide its letter dated February 25, 2020 has withdrawn the restriction imposed for obtaining prior approval of RBI for opening of banking outlets. The same informed to the exchanges by the Bank vide letter dated February 25, 2020. The RBI vide its communication dated August 17, 2020 has lifted the other regulatory restriction "the remuneration of the MD & CEO of the Bank stands frozen, at the existing level". the bank said in a stock exchange filing.
Bandhan Bank's holding company BFHL on 3 August sold 20.95 per cent stake worth over ₹10,550 crore as part of complying with regulatory requirements.
Bandhan Financial Holdings Ltd (BFHL) has offloaded more than 33.73 crore shares in the secondary market.
BFHL -- the Non-Operative Financial Holding Company (NOFHC) of the lender -- was required to reduce its excess shareholding to 40 per cent of the paid-up voting capital of the bank.
"In order to be fully compliant with the Licensing Guidelines, the NOFHC has today i.e. August 3, 2020 informed the bank that it has diluted its excess shareholding of 20.95 per cent i.e. 33,73,67,189 equity shares of ₹10 each fully paid-up in the bank through secondary market sale," the bank said in a filing to the stock exchanges.
"Consequent to the... transaction, the shareholding of NOFHC in the bank has been reduced to 40 per cent of the total paid-up voting capital of the bank which is in compliance with aforesaid guidelines and the licensing conditions of the bank," the filing said.
Bandhan Bank MD and CEO Chandra Shekhar Ghosh told PTI that the shares were sold at an average price of ₹313.35 apiece and the investors include GIC Singapore, Temasek and BlackRock.
On the basis of the average price, the stake sale would be worth a little over ₹10,571 crore.
Following the amalgamation of GRUH Finance Ltd with the bank effective from October 17, 2019 and issuance of fresh equity shares to shareholders of GRUH on October 21, 2019, BFHL's shareholding in the bank had come down from 82.26 per cent to 60.96 per cent.
With this transaction, promoter entity BFHL's stake has come down to 40 per cent.