RBI lifts ban on Bandhan Bank network expansion

PTI | | Updated on: Dec 06, 2021

The Reserve Bank on Tuesday allowed Bandhan Bank to expand its branch network after considering the efforts made by the private lender to comply with the licensing conditions.

The central bank in September 2018 had barred Bandhan Bank from expanding its network as the lender failed to reduce the promoters’ stake to 40 per cent from close to 82 per cent within the stipulated three-year time frame of commencing operations.


“We would like to inform that the Reserve Bank of India vide its letter dated February 25, 2020 has informed that though the bank is still not in compliance with the licensing condition on dilution, considering the efforts made by the bank to comply with the said licensing condition,” Bandhan Bank said in a regulatory filing.


Currently, the promoters’ holding in the bank is 62 per cent. The bank said RBI has lifted the regulatory restriction on branch opening, subject to the condition that the bank ensures that at least 25 per cent of the total number of banking outlets opened during a financial year are opened in unbanked rural centres, it added.

Bandhan Bank had commenced operations on August 23, 2015. According to RBI’s bank licence norms, a private sector bank’s promoter will need to pare holding to 40 per cent within three years, 20 per cent within 10 years and to 15 per cent within 15 years.

Bandhan Bank currently has 4,288 banking outlets, including branches. Shares of Bandhan Bank on Wednesday jumped nearly 5 per cent in early market.

Published on February 26, 2020
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