Shares of Bandhan Bank gained as much as 4.7 percent on Wednesday to Rs 423 after the Reserve Bank of India (RBI) allowed its branch network expansion plans.
On Tuesday, the private lender "that the Reserve Bank of India vide its letter dated February 25, 2020 has informed that though the Bank is still not in compliance with the licensing condition on dilution, considering the efforts made by the Bank to comply with the said licensing condition, it has lifted the regulatory restriction on branch opening, subject to the condition that the Bank ensures that atleast 25 % of the total number of 'Banking Outlets' opened during a financial year are opened in unbanked rural centres."
The bank's managing director and CEO, CS Ghosh, told BloombergQuint that there are plans to open 250 branches by March.
In September 2018, the central bank had placed restrictions on expansion of Bandhan Bank's network after it failed to reduce the promoters' stake to 40 percent within three years of commencement of business, as per regulations.
The bank had commenced operations in August 2015 and its promoter stake stood at 82 percent in September 2018.
At present, the promoters' stake is still over the regulatory requirements at 62 percent.
RBI's bank licence norms require private sector bank's promoter to pare holding to 40 percent within three years, 20 percent within 10 years and to 15 percent within 15 years.