- October 30, 2019
- Posted by: @webmaster
- Category: Current Affairs News
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 1 crore on the Bandhan Bank for non-compliance with the guidelines on promoter holding. The Bandhan Bank was required to bring down its non-operative financial holding company in the bank in excess of 40% of the total paid up equity capital to 40% within 3 years from the date of commencement of business of the bank. The deadline for doing this was August 2018.
Failing to meet these licensing guidelines attracted a show cause notice from the RBI advising it to show cause as to why penalty should not be imposed for non-compliance. Following unsatisfactory reply, the monetary penalty was imposed on the bank.
The Bandhan bank in January announced the acquisition of Gruh Finance Ltd, the affordable housing finance arm of Housing Development Finance Corp. (HDFC), in a share swap deal. The acquisition is expected to lower the promoter holding of Bandhan Financial Holdings in the bank from 82.26% at present to 61%.
The penalty has been imposed in exercise of powers vested in the RBI under the provisions of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by the RBI.
The RBI has stated that, the action on Bandhan Bank is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
About Bandhan Bank
Bandhan Bank Ltd. is an Indian banking and financial services company headquartered in Kolkata, West Bengal. It has its presence in 34 out of 36 states and Union Territories of India. The Bank has 4,229 banking outlets pan-India serving more than 1.83 crore customers. Of these outlets, 1,009 are bank branches, 3,025 Doorstep Service Centers (DSCs) and 195 GRUH centers.
On June 17, 2015, the Reserve Bank of India granted the universal banking license to Bandhan Bank. The same year, on August 23, the bank started operations with 501 branches, 50 ATMs and 2,022 SC. The bank has mobilized deposits over Rs.49,195 crore and the loan outstanding stands at Rs.64,186 crore, as on September 30, 2019.