The restriction was removed after the bank complied with the RBI’s promoter shareholding norms
Chandra Shekhar Ghosh, the 59-year-old CEO of Bandhan Bank, had received a remuneration of ₹2.1 crore in FY20
Bandhan Bank Ltd on Monday said the Reserve Bank of India has withdrawn the restrictions it had imposed on the remuneration of its chief executive in 2018. Chandra Shekhar Ghosh, the 59-year-old CEO of the bank, had received a remuneration of ₹2.1 crore in FY20.
“The RBI vide its communication dated 17 August 2020 has lifted the other regulatory restriction: the remuneration of the managing director and chief executive of the bank stands frozen, at the existing level," the lender said in a regulatory filing.
The restriction was removed after the bank complied with the RBI’s promoter shareholding norms, with the promoter stake dilution announced on 3 August, when its holding company, Bandhan Financial Holdings Ltd (BFHL) sold 20.95% stake to at least seven investors. This led to a reduction in promoter stake to 40%, or the level prescribed by the regulator.
The buyers included Singapore’s state investors GIC and Temasek, which purchased shares through affiliates Caladium Investment Pte Ltd and Camas Investment Pte Ltd, respectively, besides Morgan Stanley Asia Singapore Pte, Bandhan Employees’ Welfare Trust, Copthall Mauritius Investment Ltd, Societe Generale, and Credit Suisse Singapore Ltd.
GIC holds a 4.9% stake via Caladium, Caladium bought 40.07 million shares, Camas Investments picked up 24.58 million shares, and Morgan Stanley Asia holds 8.17 million shares, showed data from BSE.
In 2018, the central bank had restricted the expansion of Bandhan’s branch network, and put a cap on Ghosh’s remuneration after the bank failed to comply with its norms on shareholding.
However, citing the efforts made by the bank in reducing its promoter shareholding, RBI lifted the restrictions in February 2020, with certain conditions.
As on 31 March, the lender had 4,559 banking outlets, including 1,018 branches, 195 home loan centres, and 3,346 banking units.
In January 2019, Bandhan Bank had acquired HDFC Ltd-owned Gruh Finance Ltd in an all-share deal, as part of the efforts to bring down its promoter shareholding. Prior to the deal, Bandhan Financial held an 82.28% stake. The acquisition also helped Bandhan expand its housing finance portfolio.
Shares of Bandhan Bank on the BSE stood at ₹287.3 on Monday, down 0.31% from its previous close.