RBI lifts curbs on Bandhan Bank CEO’s remuneration

NEW DELHI: The Reserve Bank of India has withdrawn restrictions it had imposed on Bandhan Bank CEO’s remuneration after the promoter’s holding in the bank was reduced to 40 per cent, the bank informed the stock exchanges on Monday.

“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,” the bank said.

The 59-year-old chief executive of the bank, Chandra Shekhar Ghosh’s remuneration was frozen since September 2018 at the level it was that time since the bank’s promoter — the Bandhan Financial Holdings — failed to bring down its stake as mandated by the regulator. The promoter’s holding was then at 82 per cent.

Early this month, however, the promoter diluted 20.95 per cent stake in the bank for Rs  10,500 crore through a block trade. In 2019, the bank acquired Gruh Finance which had helped it pare down promoter’s holding to 60.95 per cent from 82 per cent.

The punitive actions on Bandhan Bank imposed in 2018 also included included withdrawing permission to open branches. However, the RBI removed the first restriction in February “considering the progress of the dilution of excess shareholding” of the holding company. As of March 31, 2020, the bank has 4,559
outlets, including 1,018 branches and 195 home loan centres.