Bandhan Bank is open to exploring “inorganic opportunities” to pare down the promoters’ stake to the 40 per cent as mandated by the Reserve Bank of India in the licensing norms for universal banks.
In an analysts call on Saturday, Sunil Samdani, CFO, Bandhan Bank said the bank may look at inorganic opportunities in MSME finance and affordable housing finance in line with the bank’s overall strategy for growth. It may also consider getting into the mutual fund or insurance business at the holding company level.
“As per the original plan, we were to get into other financial business like insurance and mutual fund after three years of forming a bank. We will evaluate these businesses going forward to help dilute the stake,” Samdani said in the call.
The RBI had, on Friday, restricted Bandhan Bank from opening branches freely and had also frozen the remuneration of CS Ghosh, the bank’s MD and CEO, at current levels. The bank can, however, open branches with prior approval of RBI.
As per licensing norms, the bank had to bring down promoters stake to 40 per cent from the current level of 82.28 per cent within three years of commencing operations. The bank commenced operations in Augut 2015, so it had to ideally reduce the promoter holding by August 2018. The bank went for an IPO in March this year, when promoter stake came down from 89.62 per cent to the current level.
As per SEBI norms, the holding company cannot sell any shares for entering other businesses during the one year lock-in period post the IPO. On the option of secondary sale of shares, Samdani said, the bank is adequately capitalised at over 30 per cent and any issuance would depend on fund requirements.
Bandhan Bank had planned to open 1000 branches, up from its current 937 branches, by March 2019.The current restrictions on opening new branches will not affect the business of the bank. “We will continuously engage with the RBI and give them the comfort and roadmap as to how we plan to bring down promoter holding,” he said.