After RBI notice, Bandhan Bank lists options to cut promoters’ shareholding

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Kolkata, Sep 30: A day after the Reserve Bank of India (RBI) put curbs on Bandhan Bank for not complying with shareholding norms, the lender laid out several options, including inorganic growth, to reduce the promoters’ stake, in a conference call with analysts.
The bank would consider buyouts in the micro, small and medium enterprises (MSME), housing finance, and microfinance institution (MFI) space, said Chief Financial Officer Sunil Samdani. The bank, he said, would also look at entering the mutual fund and insurance business at the holding company level to reduce the promoters’ shareholding.
However, according to the Securities and Exchange Board of India’s (Sebi’s) norms, the holding company cannot sell any shares for entering other businesses during the lock-in period.
The bank told analysts that the target of reducing the shareholding from about 82 per cent to 40 per cent was stringent to fulfil in the near term and, hence, “showing progress would be appreciated”.
Another option that the bank will consider is a change in the holding company’s structure. Earlier, one of the proposals considered by Bandhan Bank to reduce the promoters’ shareholding was to merge Bandhan Financial Services, Bandhan Financial Holding, and Bandhan Bank. This would bring down the promoters’ holding to about 40 per cent. However, in general, the RBI has been in favour of a holding company for a new bank, as it protects depositors’ interests.
On the option of secondary sale of shares, Samdani said that with the bank being adequately capitalised, any issuance would depend on fund requirements.
Bandhan Bank’s capital adequacy ratio is in excess of 30 per cent, and it was comfortable at the 16-18 per cent level, he said.