Post merger with Gruh, Bandhan Bank planning OFS to reduce stake to 40%: CS Ghosh

We already have 3,014 micro credit offices. That together with 986 bank branches will take the total number of banking outlets to 4,000, said CS Ghosh, CMD, Bandhan Bank, in an interview with ETNOW.

Edited excerpts:

How much branch expansion has been done so far? What is the outlook on expansion going ahead?

We had 978 branches earlier. Yesterday, we opened two branches and today we have opened one branch in a very renowned place in Kolkata. So, now we have 981 branches and another five branches will be opened tomorrow and day after tomorrow. By March end, we will have 986 branches.

We already have 3,014 micro credit offices. So, total number of our banking outlets would be 4,000 31st March 2019. We have received approval for 25 branches from RBI. We would open eight by March-end. The rest will be opened from April onwards.

Do you still have to seek the RBI’s permission for branch expansion and if so, what is the kind of permission that the bank is now seeking?

Till now we need RBI permission and as per our business plan for growth of the bank, we have sought permission and got it. Accordingly, we are opening the branches.

RBI has recently given nod for Bandhan Bank’s merger with Gruh Finance. However, RBI has allowed HDFC limited stake in the merged entity -- 9.9% versus 14.9%. What will be the implications of this on the merged entity?

This is as per banking Act. Any entity can take up to 5% without RBI permission and 10% with RBI permission. They already got that permission. So this will not have any impact on this merger. We have already got the RBI approval for merger and we are waiting for SEBI approval. Then, we are going to place the application to NCLT and we have already applied on the Competition Commission. Once the approval comes, we will be able to merge.

Post all the regulatory approvals, when can we expect the merger to be completed?

As I said, we are now waiting for SEBI and CCL approval before applying to NCLT. The process takes nine to 12 months. We expect to get it within that period.

Post the merger, Bandhan Bank promoters are still holding around 60% in the bank and the management needs to bring down the stake to 40%. What are the other options that you are exploring at this stage?

It will come down to 60% by merger with Gruh. For reducing the balance amount, we are planning an offer for sale (OFS) or any other way. We are very closely working on that process and whenever it comes, we would like to inform you accordingly.

But we are very clear. We will complete the process in compliance with RBI regulations.

Are there any other inorganic plan or will the management look for equity infusion going forward?

There is no other inorganic plan. The only one we had, has already been executed.