Bandhan fined for not cutting stake

Mumbai, Oct 29: The Reserve Bank of India (RBI) has slapped a fine of Rs 1 crore on private sector Bandhan Bank for non-compliance of its guidelines on promoter holding requirement.

The RBI has, by an order on Thursday, imposed a monetary penalty of Rs 1 crore on Bandhan Bank for non-compliance with the guidelines on promoter holding contained in 'Guidelines for Licensing of New Banks in Private Sector', the central bank said in a release.

This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Act, taking into account the default committed by the bank in complying with the aforesaid licensing guidelines and conditions, it said.

"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank," the RBI said further.

As per the required guidelines, the bank was required to bring down the shareholding of its non-operative financial holding company in the bank in excess of 40 per cent of the total paid-up equity capital to 40 per cent within three years from the date of commencement of business of the bank.

However, the bank failed to comply with the said licensing guidelines.

The RBI said a show cause notice was issued to the bank as to why penalty should not be imposed for non-compliance. —PTI