The apex bank regulator Reserve Bank of India imposed a penalty of Rs 1 crore on the Bandhan Bank. The penalty was imposed for not bringing the promoter holding below 40% of its paid-up voting capital within three years of commencement of business of the bank, the bank said in BSE filing.
As per the RBI rules contained in ‘Guidelines for Licensing of New Banks in Private Sector’, a bank should bring down the promoter shareholding up to 40% or below within the first three years from the date of commencement of business.
Bandhan Bank which recently merger with Gruh Finance which subsequent to the merger brought the promoter shareholding down to 60.96% from 82.26% earlier. The lender had before the imposition of penalty stated that it is making continuous efforts to bring down the promoter shareholding upto 40% but failed to do.
Earlier, Bandhan Bank was issued a show cause notice by the Reserve Bank of India as to why the penalty should not be imposed. The regulator not being satisfied with the reply submitted issued an order today dated 29 October 2019 imposing the penalty in the exercise of its power under Section 22 of Banking Regulation Act, 1949
Bandhan MFI obtained in principle universal license from RBI in 2014 and started operations only in August 2015. The bank later came out with an IPO in March 2018.