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Last Updated : Dec 10, 2018 07:20 PM IST | Source: PTI

Bandhan Bank closely monitoring Kotak Bank development

Kotak Mahindra Bank on December 12 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 percent by December 2018.

 
 
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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 December 12 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 percent by December 2018.

"We are observing the Kotak Bank development very closely," a Bandhan Bank source told PTI.

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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 percent from close to 82 percent, 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 percent 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 percent from about 30 percent 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 contested.

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First Published on Dec 10, 2018 07:09 pm
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