Indian lender Bandhan Bank has secured the approval from the Reserve Bank of India (RBI) to open up to 40 new branches by the end of this year.

In September, the country’s apex bank imposed a restriction on the bank on opening new branches due to its failure to reduce promoter’s stake in the company within the deadline.

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Commenting on the approval, Bandhan Bank MD and CEO CS Ghosh told BusinessLine: “We had approached the RBI for opening 40 branches, and they have approved it.

“We opened five branches in West Bengal today, and plan to open the remaining by the end of this month, taking the total branch count to 978.”

Bandhan Financial Holdings (BFHL) is the promoting entity of the bank and is owned by Bandhan Financial Services (BFSL).

Currently, the promoter holds 82.28% stake in the bank.

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According to RBI regulations, the promoter holdings in the bank should be reduced to 40% within three years from commencing of operations and further to 20% within ten years.

Bandhan Bank started its operations in August 2015. Accordingly, it should have reduced the promoter holding by August 2018.

BusinessLine reported that the bank was unable to comply with the RBI regulations due to a Securities and Exchange Board of India (SEBI)-directive, which puts a one-year lock-in period on shares held by the promoter following an issue.

In October, Bandhan Bank received the exemption from the SEBI.

Now, the bank is said to be exploring different ways to dilute the promoter’s stake in the company.