Bandhan Bank stopped from opening new branches, RBI freezes CEO's salary

Banking regulator Reserve Bank of India (RBI) today stopped Bandhan Bank from opening new branches as it was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 per cent as required under RBI's licensing condition.

The central bank has also ordered freezing of Bandhan Bank CEO Chandra Shekhar Ghosh's salary over failure to stick to shareholding rules. The promoter stake in Bandhan Bank is currently at around 82.28 per cent.

"General permission to open new branches stands withdrawn and the Bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further notice," Bandhan Bank said in a regulatory filing.

"The Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 per cent and shall continue to engage with RBI in this behalf," it added.

The Kolkata-headquartered Bandhan Bank was incorporated on December 23, 2014 as a wholly-owned subsidiary of Bandhan Financial Holdings Limited.