Bandhan Bank shares hit a record low of Rs 451.20 on BSE
Mumbai: Shares of Bandhan Bank Ltd hit their lower circuit of 20 percent on Monday after the Reserve Bank of India barred the lender from opening branches without its approval and ordered the freezing of the salary of its CEO Chandra Shekhar Ghosh due to failure to meet shareholding rules.
Investors in the Share market lost a little over Rs 13,454 crore on Monday trade.
There were pending sell orders of 491,723 shares, with no buyers available.
The stock fell 20 per cent to hit low of Rs 451.20 on BSE
RBI said in a press report “that since the Bank was not able to bring down the shareholding of non-operative financial holding company (NOFHC) to 40 percent as required under the licensing condition, general permission to open new branches stands withdrawn and the bank can open branches with prior approval.”
The salary of the MD & CEO of the bank stands frozen at the existing level, till further notice
Bandhan Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the bank to 40 percent and shall continue to engage with RBI in this behalf, company added.
RBI’s licensing norms require a private sector bank to bring down its promoter shareholding to 40 percent within three years of operations.
As on June 2018 as per BSE shareholding pattern the promoter and promoter group were holding 82.28 percent stake in the company.
According to firm, RBI curb new branch opening while there is a pending clarity on stake reduction plan. Promoter need to take exception approval from regulators to reduce the stake.
The above regulation should not be a drag on operating growth near term, it added.