Bandhan Bank has received RBI nod to re-appoint Chandra Shekhar Ghosh as its MD and CEO for three years, lower than the five-year tenure approved by the company's board in November last year.
"The Reserve Bank of India vide its communicated dated June 8, 2021, has granted approval for re-appointment of Chandra Shekhar Ghosh, Managing Director & Chief Executive Officer (MD&CEO) of the bank, for a period of three years, with effect from July 10, 2021," the lender said in a regulatory filing on Tuesday.
On November 2, 2020, the board of the bank had approved re-appointment of Ghosh as the MD and CEO for a period of five years with effect from July 10, 2021, subject to approval of the RBI and shareholders.
Ghosh's current term comes to an end on July 9, 2021.
With 30 years of experience in microfinance and development, Ghosh had set up Bandhan as an NGO in April 2001 and it was converted into an NBFC later.
Subsequently, it was established as a universal bank in August 2015 after getting licence from the RBI.
The Kolkata-headquartered lender earlier in September 2018 was barred by the RBI from expanding its branch network. The RBI had also freezed Ghosh's remuneration as the lender failed to comply with a licensing condition that required cutting down promoters' stake to 40 per cent, from close to 82 per cent, within three years of commencing operations.
The restrictions on expansion were lifted in February 2020 by the RBI even as the bank was not in compliance with the licensing condition, given the efforts made by the lender to comply with the guidelines. It had reduced the promoters' stake to 62 per cent by then.
RBI had lifted the regulatory restriction on branch opening, on the condition that the bank ensured that at least 25 per cent of the total number of banking outlets opened during a financial year were in unbanked rural centres.
The curbs on Ghosh's remuneration were lifted in mid-August 2020.
According to RBI's bank licence norms, a private sector bank's promoter will need to pare holding to 40 per cent within three years, 20 per cent within 10 years and to 15 per cent within 15 years.
Bandhan had merged with mortgage lender HDFC's low-value home loan company Gruh Finance in order to reduce the promoter ownership to the 60 per cent level from the earlier 82 per cent.
Bandhan is the first bank in India which has been transformed from a microfinance institution.
As of March 31, 2021, the promoter and promoter group shareholding in Bandhan Bank stands reduced to 39.99 per cent, as per data on BSE.
Bandhan Bank stock closed at Rs 316.45 apiece on BSE, down 1.14 per cent.