Bandhan Bank shares jump 5% after RBI allows expansion of branches
Shares of Kolkata-based Bandhan Bank leapt nearly 5% on Wednesday after the Reserve Bank of India (RBI) lifted the ban on it and allowed an expansion of its branch network on Tuesday. The RBI lifted the curb after considering the efforts of the bank to comply with the licensing conditions.
The bank in a regulatory filing stated, “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, it has lifted the regulatory restriction on branch opening.”
The Central Bank lifted the restriction on the condition that the bank ensures at least 25% of the total number of ‘Banking Outlets’ opened during a financial year are opened in unbanked rural centres.
In September 2018, the RBI had imposed a ban on the lender after it failed to reduce the promoters’ stake to 40% from close to 82% within the stipulated three-year time frame of commencing operations.
Three months later, the lender announced that it will add 40 more branches after it receives approval from the regulator. Presently, the promoters have a 61% holding in the bank.