Bandhan Bank closely monitoring events at Kotak Mahindra Bank
Kolkata: Bandhan Bank is closely monitoring the developments in Kotak Mahindra Bank with respect to reducing promoter holding using preference shares, as the RBI has mandated a similar directive to the Kolkata- based lender.
Kotak Mahindra Bank on Monday said it has moved the Bombay High Court against the Reserve Bank of India (RBI), which had asked promoters of the bank to bring down their stake to 20 per cent by December 2018.
"We are observing the Kotak Bank development very closely," a Bandhan Bank source said.
The bank's CEO and MD Chandra Shekhar Ghosh, however, declined to comment on the matter, saying he is not entitled to speak on regulatory issues. RBI had imposed restrictions on Bandhan Bank's branch expansion after it failed to pare promoters' stake to 40 per cent from close to 82 per cent, within the stipulated three- year time frame.
The lender commenced operations on August 23, 2015.
Bank license norms require a lender to bring down promoter holding to 40 per cent within three years of starting operations. Bandhan Bank has a total of 937 branches, the number remaining below its target of opening 1,000 branches by March 2019.
The Securities and Exchange Board of India (Sebi) had in October exempted the bank from the one-year promoter shareholding lock-in rule, allowing its promoter, Bandhan Financial Holdings Ltd (BFHL) to bring down holding.
In August, Uday Kotak, the founder and promoter of Kotak Mahindra Bank, has pared down his stake in the bank to 19.70 per cent from about 30 per cent following issuance of preference shares.
Within a few days, the RBI said the stake dilution by Kotak does not meet its regulatory norms on the same, something the private sector lender