Bandhan Bank has been one of the most recent bank licensees and did extremely well after listing. However, the stock did correct sharply after RBI raised some queries about the quality of assets and the ownership pattern of the bank. Recently, the RBI also imposed a fine of Rs.1 crore for non-adherence to banking rules and regulations.

From the lows of last year, the stock price of Bandhan Bank has almost bounced back close to 100%. Although profits and margins continue to be healthy, it remains to be seen how the bank manages its bad assets problem going ahead. For now the valuations do look a little stretched and is best avoided. However, the bank is fundamentally good and has a good business model.