Comments
Bandhan Bank is hopeful that it will soon be able to reduce promoters’ stake to 40 per cent as mandated by the Reserve Bank of India. The bank may consider, among other options, going in for an offer-for-sale (OFS) to pare its stake.
‘A good plan in place’
According CS Ghosh, Managing Director and CEO of Bandhan Bank, the bank has “a good plan” in place to bring down promoter holding to 40 per cent. He, however, ruled out the possibility of any further acquisition to reduce promoters’ stake.
“We hope to bring it down to 40 per cent very shortly,” he told newspersons on the sidelines of the opening of its branch in Burrabazar, in the central business district of Kolkata, on Thursday.
Bandhan Bank had, in January this year, announced merger of Gruh Finance with it, which would bring down promoter holding in the bank to about 61 per cent from the current level of 82.3 per cent.
The central bank, in September last year, pulled up Bandhan Bank for its failure to bring down promoter holding to 40 per cent as mandated in the licensing norms for universal banks. The central bank had withdrawn permission to Bandhan Bank to open new branches and had also put a freeze on the remuneration of its MD and CEO.
According to the RBI’s licensing norms, promoter holding should be brought down to 40 per cent within three years of starting operations. Bandhan, which was a microfinance institution, received in-principle approval from the RBI for setting up a universal bank in April 2014, and it commenced operations in August 2015. So, ideally, it should have brought its promoter holding down to 40 per cent by August 2018.
The bank, which recently received the RBI nod for the merger, is now awaiting SEBI clearance for the same. Once it gets the SEBI clearance, it would approach the National Company Law Tribunal (NCLT) for merger approval. Meanwhile, the bank has already sought clearance from the Competition Commission of India.
According to Ghosh, it usually takes between 9 and 12 months for such (merger) process to be complete. The bank is hopeful of completing its merger with Gruh Finance within a similar timeframe.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.