On Monday this week, the Reserve Bank of India has removed all the restrictions imposed on Bandhan Bank Ltd. because it failed to comply with its promoter shareholding norms in the year 2018.

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R.B.I.’s restrictions included the expansion of Bandhan’s branch Network, and also stopped the remuneration of Chandra Shekhar Ghosh who is the Managing Director and Chief Executive Officer of Bandhan Bank Ltd.

On 3rd August 2020, the Bandhan Bank’s holding company Bandhan Financial Holdings Ltd (BFHL) sold it’s 20.95% stake worth $1.4 billion or over Rs 10,500 crore at a discount to at least seven investors. This led to a reduction in BFHL’s stake to 40%, which is the level acceptable for the regulator.

The buyers included Singapore’s state investors GIC and Temasek, who purchased the shares through their subsidiaries Caladium Investment Pte Ltd and Camas Investment Pte Ltd, respectively, besides Morgan Stanley Asia Singapore Pte, Bandhan Employees’ Welfare Trust, Copthall Mauritius Investment Ltd, Societe Generale, and Credit Suisse Singapore Ltd.

In September 2018, the RBI had imposed the restrictions and citing the efforts made by the bank in reducing its promoter shareholding, RBI lifted the restrictions in February 2020, with certain conditions to seek approval for opening banking outlets.

On March 31 Bandhan Bank was having around 4,559 banking outlets, that included 1,018 branches, 195 home loan centres, and 3,346 banking units.

In January 2019, Bandhan Bank Ltd. acquired the Gruh Finance Ltd owned by HDFC Ltd. which is a home loan company and this helped to reduce the Bandhan Bank’s promoter ownership to 80% and also helped in expanding the Bandhan Bank’s housing finance portfolio.

With Warm Regards,

CL Bureau.

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