Money & Banking

Bandhan Bank fined ₹1 crore for not complying with promoter holding norm

PTI Mumbai | Updated on October 29, 2019

The Reserve Bank of India has slapped a fine of ₹1 crore on private sector Bandhan Bank for non-compliance of its guidelines on promoter holding requirement.

The RBI has, by an order on Thursday, imposed a monetary penalty of ₹1 crore on Bandhan Bank for non-compliance with the guidelines on promoter holding contained in ‘Guidelines for Licensing of New Banks in Private Sector’, the central bank said in a release.

The penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Act, taking into account the default committed by the bank in complying with the aforesaid licensing guidelines and conditions, it said.

“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank,” the RBI said further.

According to the required guidelines, 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, the bank failed to comply with the said licensing guidelines.

The RBI said a show-cause notice was issued to the bank as to why penalty should not be imposed for non-compliance with the said licensing guidelines.

After considering the reply received, the RBI came to the conclusion that the bank had failed to comply with the licensing guidelines.

Published on October 29, 2019

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