Fixing pillars on deficiencies in regulatory compliance, RBI corners Bandhan bank imposing a bulk penalty

News Bharati    30-Oct-2019
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Mumbai, October 30: Imposing a monetary penaly of Rs 1 crore, the Reserve Bank of India on Wednesday has accused Bandhan Bank Limited for non compliance with the guidelines on promoter holding contained in ‘Guidelines for Licensing of New Banks in Private Sector’ dated February 22, 2013.

 
"The action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank", RBI said in its statement.
 
In terms of the aforesaid licensing guidelines read with the licensing conditions, the bank was required to bring down the shareholding of its Non-Operative Financial Holding Company in the bank in excess of 40 per cent of the total paid-up equity capital to 40 per cent within three years from the date of commencement of business of the bank.
  
However, as the bank failed to comply with the said licensing guidelines, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said licensing guidelines.
 
After considering the reply received from the bank, submissions made by the bank during the personal hearing and the documents submitted by it, RBI came to the conclusion that the bank had failed to comply with the licensing guidelines read with the licensing conditions imposed by RBI and decided to impose monetary penalty on the bank.