After Yes Bank, RBI cracks down on Bandhan Bank
After Yes Bank, here comes yet another action on a private sector bank. The Reserve Bank of India (RBI) has barred Bandhan Bank from opening new branches and has also freezed the compensation of its CEO.
The RBI has withdrawn Bandhan Bank’s general permission to open new branches, but it can open branches with prior approval of the Reserve Bank of India if it is necessary and required. Also, the remuneration of the MD & CEO of the bank has been frozen with immediate effect at the existing level and will remain frozen till further notice.
These measures have been taken by the RBI because the bank was not able to bring down the shareholding of non-operative financial holding company (NOFHC) to 40 per cent as required under the licensing condition.
The bank has commented that it is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the bank to 40 per cent and will continue to engage with the RBI in this behalf.
Bandhan Bank is presently the eighth largest bank by market capitalisation.