Uncertain outlook for investors of Bandhan Bank; stock falls 20%

Stock likely to remain under pressure until promoters take steps to reduce stake

Investors in Bandhan Bank hit the exit button after the Reserve Bank of India’s (RBI) diktat to freeze its Managing Director and Chief Executive Officer’s remuneration. The RBI’s action is a result of the bank’s promoter entity, Non Operative Financial Holding Company (NOFHC), not reducing its stake from 82 per cent to 40 per cent in three years from August 2015, as required by the universal banking norms.
 
As the news came after Friday’s market closing, the stock faced heavy selling and was locked in the lower circuit on Monday. This was despite the management’s attempt to pacify investors