SEBI allows Bandhan Bank to offload promoters’ stake early

With Sebi now giving the relaxation, it ends uncertainty surrounding the bank, which had come under the banking regulator’s scanner.

Published: 13th October 2018 04:54 AM  |   Last Updated: 13th October 2018 04:54 AM   |  A+A-

Bandhan Bank

For representational purposes (File | Reuters)

By Express News Service

MUMBAI:  In a major relief, capital markets regulator Securities and Exchange Board of India (SEBI) on Friday gave exclusive relaxations to Bandhan Bank, allowing the microfinance-turned-banking entity to offload promoters’ stake within 12 months of listing. The SEBI regulation mandates a one-year lock-in period for promoter shareholdings after listing on exchanges. Bandhan was listed in March, and promoters were to wait until next March to sell shares. But the bank found itself in RBI’s crosshairs, which pulled up the lender for not paring promoter’s stake in line with banking regulations.

As per RBI’s guidelines for licensing of new banks in the private sector, when a non-banking financial company launches a private bank through a holding company, it must pare down its promoter holding to 40 per cent within three years of starting operations.

Bandhan, which started banking operations in August 2015, was to trim its promoter’s stake from over 82 per cent to below 40 per cent by August 2018, but couldn’t, thanks to Sebi’s one-year lock-in period. With Sebi now giving the relaxation, it ends uncertainty surrounding the bank, which had come under the banking regulator’s scanner.

“In continuation to our intimation dated September 28, 2018,it is hereby informed that the bank has received an exemption from the Securities and Exchange Board of India with respect to (i) lock-in of one year on the equity shares held by the promoter; and (ii) eligibility condition of one year from listing,” Bandhan said in a filing with the exchanges.

Bandhan Financial Holdings is a non-operative financial holding company and acts as the promoting company for Bandhan Bank. The bank went in for an initial public offering in March, after which its promoter holding fell to 82.28 per cent from 89.62 per cent.The RBI has been wielding the regulatory stick on banks. It restricted Bandhan from further branch expansion without its explicit consent, and has pulled up Yes Bank, Axis Bank and ICICI Bank for lapses.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp