Categories: Business

RBI lift curb on Bandhan bank CEO pay as promoter cuts stake

Photo: PTI (FILE)

RBI lift curb on Bandhan bank CEO pay as promoter cuts stake

new Delhi. The Reserve Bank of India (RBI) has removed restrictions on salaries of MD and CEO of Bandhan Bank. It has been decided to lift the restriction on salaries of MDs and CEOs after the bank promoter's stake was brought down to 40 per cent as per central bank norms.

The RBI had in September 2018 directed to freeze the salaries of the bank's MD and CEO, imposing various restrictions on Bandhan Bank. Bandhan Bank was banned in various ways due to non-compliance with RBI's licensing rules for new private sector banks. As per the licensing guidelines, the Non-Operating Financial Holding Company (NOFHC) is required to bring its additional stake up to 40% of the paid-up voting equity capital of the bank.

In a regulatory filing, the bank said on Monday that the RBI, through its communication dated August 17, 2020, has also lifted the ban on freezing the salaries of the bank's MD and CEO. Bandhan Bank has stated that, "With this recent decision of the central bank, all the regulatory restrictions imposed on the bank on September 19, 2018 have been lifted." The news has come to light after Bandhan Financial Holdings Limited reduced its stake to 20.95 per cent through a block deal earlier this month. Following the deal, the company holds a 40 percent stake in the bank.

This post was published on August 17, 2020 11:15 pm

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