The Reserve Bank of India (RBI) has withdrawn the general permission given to Bandhan Bank to open new branches and it can now do so only with prior approval of the central bank.

In a communication to the BSE on Friday, the bank said “RBI has communicated to us that since the bank was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 per cent as required under the licensing condition, general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI.”

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Remuneration of the MD & CEO of the bank, Chandrashekhar Ghosh, also stood frozen at the existing level till further notice, the communication said.

Ghosh was not available for comments.

The bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the bank to 40 per cent and shall continue to engage with RBI in this behalf, the bank said in the statement.

After getting an in-principle approval from the RBI to start universal banking in April 2014 with the rider to come out with an IPO within three years of starting of operations, Bandhan Bank came out with an IPO in March 2018 and had opened 864 bank branches across the country so far.