Bank failed to reduce promoter holding to 40 pc within 3 years
MUMBAI: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs1 crore on Bandhan Bank Ltd for failing to comply with the promoter holdings norms.
As per RBI guidelines for promoter holdings, Bandhan Bank’s promoter, Bandhan Financial Holdings Ltd, was supposed to bring down its holding in the bank from the initial 82 per cent to 40 per cent within three years of the commencement of the operations. The bank had failed to meet the deadline which had already lapsed in August, 2018.
“The Reserve Bank of India (RBI) has, by an order dated October 29, 2019, imposed a monetary penalty of Rs1 crore on Bandhan Bank Ltd for non-compliance with the guidelines on promoter holding contained in ‘Guidelines for Licensing of New Banks in Pvt Sector’ dated February 22, 2013 (licensing guidelines) read with the conditions imposed by RBI in exercise of powers under Section- 22 of the Banking Regulation Act, 1949 (the Act) at the time of issuing banking licence to the bank,” RBI said in a statement.
RBI said the the bank was required to bring down the shareholding of its non-operative financial holding company in the bank in excess of 40 per cent of the total paid-up equity capital to 40 per cent within three years from the date of commencement of business of the bank. However, as the bank failed to comply with the said licensing guidelines, a notice (SCN) was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said licensing guidelines.
“After considering the reply received from the bank, submissions made by the bank during the personal hearing and the documents submitted by it, RBI came to the conclusion that the bank had failed to comply with the licensing guidelines read with the licensing conditions imposed by RBI and decided to impose monetary penalty on the bank,” RBI said in the statement.