Bandhan Bank on Monday said it has complied with the licensing norms of the Reserve Bank of India. The bank’s non-operative financial holding company (NOFHC) — Bandhan Financial Holdings Ltd — has diluted its stake to 40 per cent, according to the licensing requirement.

The holding company sold 337.4 million shares in block trade on the bourses on Monday morning, raising around Rs 10,500 crore with the biggest block sold at a price of Rs 311 per share.

According to bank sources, the seller is the NOFHC and the buyers are mostly the existing shareholders such as GIC, Blackrock, Temasek and SBI Mutual Fund.

“The NOFHC on Monday informed the bank that it has diluted its excess shareholding of 20.95 per cent, that is 33,73,67,189 equity shares of Rs 10 each fully paid-up in the bank through secondary market sale. Consequent to the above transaction, the shareholding of NOFHC in the bank has been reduced to 40 per cent of the total paid-up voting equity capital of the bank which is in compliance with the licensing conditions of the bank,” Bandhan Bank said in a statement to the bourses.

The bank has been exploring various options to bring down its shareholding to the prescribed level having earlier faced restrictions on expansion by the RBI for non compliance. After receiving its licence in February 2013, the bank was supposed to bring down the promoter holding to 40 per cent in three years from the start of operations, that is by August 22, 2018. Promoters will have to bring down their holding to 15 per cent within 12 years of starting operations, which is 2027.

As part of the compliance process, the bank had amalgamated Gruh Finance Limited with itself effective from October 2019 and the shareholding of the NOHFC subsequently fell to 60.96 per cent of the paid-up voting equity capital from 82.23 per cent.

Shares of Bandhan Bank tanked 10.60 per cent to Rs 308.65 on the BSE on Monday.

Sources said the bulk sale was primarily on account of the urgency of the bank in complying with the RBI regulations at one go instead of piecemeal sale in an uncertain market amid the Covid-19 pandemic.

Vision 2025

The bank’s managing director and CEO Chandra Shekhar Ghosh told The Telegraph on Monday that with the completion of five years of operation and compliance with the RBI norms, the bank will follow a plan to grow its operation in the next five years.

“The bank is now fully compliant. We can now focus on expanding our operations,” he said, adding that in a crisis situation, the bank was able to pull off the sale, which signifies investor confidence.

The bank will look to graduate eligible microcredit borrowers to MSME borrowers and besides credit, help them with services such as trade licence and income tax and GST compliance.

Ghosh said that the bank will also focus more on opportunities of housing credit in the rural sector.
Bandhan Bank had a base of 11.2 million active micro borrowers as of June 30, 2020. The bank has an overall base of 20.31 million customers.