Bandhan Bank has received the RBI’s permission to open as many as 40 branches by the end of December. The central bank’s approval comes nearly three months after it had imposed restrictions on the bank’s branch expansion plans.

“We had approached the RBI for opening 40 branches, and they have approved it. We opened five branches in West Bengal today, and plan to open the remaining by the end of this month, taking the total branch count to 978,” CS Ghosh, MD and CEO, Bandhan Bank, told BusinessLine .

RBI had, in September this year, pulled up the bank for its failure to bring down promoter holding to 40 per cent as mandated in the licensing norms for universal bank. It had also withdrawn permission to open new branches and had put a freeze on the remuneration of CS Ghosh.

Bandhan Financial Holdings (BFHL) – the promoting entity of Bandhan Bank – is owned by Bandhan Financial Services (BFSL). The promoter holding in the bank currently stands at 82.28 per cent.

As per the RBI’s licensing norms, promoter holding should be brought down to 40 per cent within three years of starting operations. So Bandhan Bank, which had commenced operations in August 2015, should have ideally brought down the promoter holding by August 2018.

However, the bank, which floated an IPO in March 2018, could not have pared promoter stake due to the SEBI mandate of a one-year lock-in on shares held by the promoter post an issue. In October, however, the bank received an exemption from SEBI to help it comply with the requirements of RBI’s Licensing Guidelines.

The bank had, in an analyst call after the RBI measure, said that it was exploring the possibility of an open offer for sale as one of the options to bring down BFHL’s holding to the mandated 40 per cent. It had also indicated that it would explore inorganic opportunities by way of acquiring a non-bank lender to pare stake.

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