Money & Banking

RBI imposes Rs 1 crore penalty on Bandhan Bank

Our Bureau Mumbai | Updated on October 29, 2019 Published on October 29, 2019

FILE PHOTO   -  REUTERS

The Reserve Bank of India (RBI) has imposed Rs 1 crore monetary penalty on Bandhan Bank for non-compliance with the guidelines on promoter holding contained in ‘Guidelines for Licensing of New Banks in Private Sector’.

The RBI, in a statement, said that this penalty was imposed in exercise of powers vested to it under the provisions of the Banking Regulation Act, 1949, taking into account the default committed by the bank in complying with the aforesaid licensing guidelines and conditions.

In terms of the licensing guidelines, read with the licensing conditions, the RBI said that Bandhan Bank was required to bring down the shareholding of its Non-Operative Financial Holding Company (NOFHC) from an 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, as the bank failed to comply with the said licensing guidelines, a notice (SCN) was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said licensing guidelines. After considering the reply received from the bank, submissions made by the bank during the personal hearing and the documents submitted by it, the RBI came to the conclusion that the bank had failed to comply with the licensing guidelines read with the licensing conditions imposed by RBI and decided to impose monetary penalty on the bank," the statement said.

As at September-end 2019, Bandhan Financial Holdings Ltd (NOFHC) held 82.26 per cent stake in Bandhan Bank.

In June 2019, the RBI had imposed a monetary penalty of ₹2 crore on Kotak Mahindra Bank Ltd for non-compliance with the directions issued to the bank by it in exercise of its powers under the Banking Regulation Act, 1949, to furnish information specified therein.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of ...the BR Act, taking into account the default committed by the (Kotak) bank in complying with the aforesaid directions issued by RBI," the RBI said.

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Published on October 29, 2019
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