Case Brief
What Happened
By an order dated October 29, 2019, RBI imposed a monetary penalty of ₹1 crore on Bandhan Bank Limited. The penalty was for non-compliance with the licensing guidelines for new private sector banks, specifically the requirement to reduce the Non-Operative Financial Holding Company’s shareholding from above 40% to 40% within three years of commencement of business. RBI said the action was taken under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, after issuing a show-cause notice, considering the bank’s reply and hearing submissions, and concluding that the bank had breached the licensing conditions.