RBI lifts ban on Bandhan Bank; stock rise

Bandhan Bank, the banking and financial services company headquartered in Kolkata (West Bengal) stated in a regulatory filing to the stock exchanges on February 25, 2020 that Reserve Bank of India (RBI) has now allowed it to open branches without its prior approval.

With this, the ban which was imposed on Bandhan Bank by RBI was also lifted. RBI, in September 2018, had imposed a ban on the bank for failing to reduce promoter ownership below the mandated 40 per cent.

Nevertheless, Bandhan Bank’s current promoter holding is still above the mandated level, that is, at 61 per cent, however, despite this, RBI removed its restriction on the pretext of ‘considering the efforts made by Bandhan Bank to comply with the said licensing condition.’

Meanwhile, the approval comes with a condition that in a financial year, 25 per cent of newly-opened banking outlets shall be in unbanked rural centres.

At 10.25 am on Wednesday, the stock of Bandhan Bank Ltd is trading at Rs 407.05, up by 0.79 per cent against its previous close of Rs 403.85. Its 52-week high is Rs 650.00 and its 52-week low is Rs 402.20 on BSE.