'The RBI vide its communication dated 17 August 2020 has lifted the other regulatory restriction: the remuneration of the managing director and chief executive of the bank stands frozen, at the existing level,' it said in a regulatory filing
Mumbai: Bandhan Bank Ltd on Monday said that the Reserve Bank of India (RBI) has withdrawn restrictions it had imposed on the remuneration of the lender’s chief executive in 2018.
“The RBI vide its communication dated 17 August 2020 has lifted the other regulatory restriction: the remuneration of the managing director and chief executive of the bank stands frozen, at the existing level," it said in a regulatory filing.
Chandra Shekhar Ghosh, the 59-year-old chief executive of the bank received a remuneration of ₹21.04 million in FY20.
The removal of the restriction was a result of the bank complying with RBI’s promoter shareholding norms with its recent promoter stake dilution. On 3 August, the bank said it met the promoter holding norms prescribed by RBI after its holding company Bandhan Financial Holdings Ltd (BFHL) sold 20.95% stake in the bank to at least seven investors. This led to a reduction in the promoter stake to 40% or the level prescribed by the regulator.
The buyers included Singapore’s state investors GIC and Temasek, which purchased the shares through affiliates Caladium Investment Pte Ltd and Camas Investment Pte Ltd respectively, and others such as Morgan Stanley Asia Singapore Pte, Bandhan Employees Welfare Trust, Copthall Mauritius Investment Ltd, Societe Generale and Credit Suisse Singapore Ltd.
GIC is an existing shareholder of Bandhan Bank, owning a 4.9% stake through Caladium, before Monday’s transaction. While Caladium took 40.07 million shares, Camas Investments purchased 24.58 million shares, and Morgan Stanley Asia bought 8.17 million shares, showed data from BSE.
In 2018, the central bank had imposed restrictions on expansion of the branch network and the chief executive officer’s remuneration after Bandhan Bank failed to comply with norms on shareholding. However, citing the efforts made by the bank in reducing its promoter shareholding, RBI lifted the restrictions in February 2020, with certain conditions.
As of 31 March 2020, the bank has 4,559 banking outlets, including 1,018 bank branches, 3,346 banking units and 195 home loan centres.
In January 2019, Bandhan Bank had acquired HDFC Ltd-owned Gruh Finance Ltd through an all-share deal, as part of its efforts to bring down promoter shareholding. Prior to the deal, Bandhan Financial held an 82.28% stake. The acquisition also helped Bandhan Bank expand its housing finance portfolio.
Shares of Bandhan Bank on the BSE stood at ₹287.3 on Monday, down 0.31% from its previous close.
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