Bandhan Bank rises after RBI allows to open branches

Bandhan Bank gained 1.62% to Rs 410.40 after the Reserve Bank of India (RBI) allowed the lender to open branches without its prior approval.

However, the regulator has given a condition that 25% of the total number of banking outlets to be opened during a financial year are established in unbanked rural areas.

"Further to our letter dated 28 September 2018, we would like to inform that RBI vide its letter dated 25 February 2020 has informed that though the bank is still not in compliance with the licensing condition on dilution, considering the efforts made by the bank to comply with the said licensing condition, it has lifted the regulatory restriction on branch opening, subject to the condition that the bank ensures that atleast 25% of the total number of 'banking outlets' opened during a financial year are opened in unbanked rural centres," the bank said in a notification on Tuesday.

Bandhan had merged Gruh Finance from HDFC Group to reduce the holding of Bandhan Financial Services, the promoter of Bandhan Bank, from little over 82% to 60.96% currently. The promoters have to lower their stake further to 40% in some time to comply with RBI's new bank licensing guidelines. The deadline for Bandhan Bank was on 23 August.

The RBI had in September 2018 barred the bank from opening new branches and also frozen the remuneration of its MD and CEO Chandra Shekhar Ghosh at the existing level till further notice.

On a standalone basis, Bandhan Bank's net profit jumped 120.7 % to Rs 731.03 crore on a 63.3% surge in total income to Rs 3,075.34 crore in Q3 December 2019 over Q3 December 2018. The bank's gross non-performing assets (NPAs) stood at Rs 1181.96 crore as on 31 December 2019 as against Rs 1064.21 crore as on 30 September 2019 and Rs 831.02 crore as on 31 December 2018.

Bandhan Bank is a commercial bank, which offers a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services.

Powered by Capital Market - Live News