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Bandhan Bank fined Rs 1 crore by Reserve Bank

Bandhan Bank fined Rs 1 crore by Reserve Bank
MUMBAI: The RBI has again imposed a Rs 1-crore penalty on Bandhan Bank for non-dilution of promoter holding in line with the central bank’s prescriptions. The RBI on Tuesday also imposed a Rs 1-crore penalty on Pune’s Janata Sahakari Bank, and Jalgaon Peoples Co-Operative Bank for not following RBI norms on recognising bad loans.

This is the second time that the RBI is acting against Bandhan for violation of shareholding norms. A year ago, the RBI barred Bandhan from opening new branches, and also ordered freezing of its CEO’s salary over failure to stick to shareholding rules. Since then, the bank brought down promoter holding from 82% to 61% by merging Gruh Finance with itself.

At the time of granting licence to Bandhan Bank, the RBI had placed a condition that the bank must bring down the shareholding of its non-operative financial holding company to 40% of the total paid-up equity capital 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,” the RBI said in a statement.

“After considering the reply received from the bank, submissions made by the lender during the personal hearing and the documents submitted by it, the RBI concluded that the lender had failed to comply with the licensing guidelines and decided to impose monetary penalty,” the banking regulator said.