New Delhi: Private sector Bandhan Bank saw a huge surge on Friday. Shares of Kolkata-headquartered Bandhan Bank jumped more than 10 percent in early trade. The reason for this is a decision of the Reserve Bank of India (RBI), which resolved the management problem of Bandhan Bank.

What is the decision of RBI

Banking regulator RBI approved the appointment of Partha Pratim Sengupta as the Managing Director and CEO of Bandhan Bank. This decision came after the stock market closed yesterday, the effect of which was seen today. As soon as the market opened on Friday, the shares of Bandhan Bank became a rocket.

Bandhan Bank shares opened with a gain at Rs 200.20 on the BSE. From here, the upward trend continued. By around 1 pm, Bandhan Bank shares were trading at Rs 206.81 with a jump of 10.18 percent.

How long will Parth's tenure be?

RBI has approved the proposal to appoint Partha Pratim Sengupta as MD and CEO of Bandhan Bank for three years. According to Bandhan Bank, Sengupta's three-year term will be counted from the date of assuming office. Sengupta will replace the bank's founder MD and CEO Chandrashekhar Ghosh. Chandrashekhar left his post on July 9.

Currently, the bank's executive director Ratan Kesh is working as the interim MD and CEO. Sengupta has a lot of experience in retail and corporate banking. He has been the MD and CEO of the public sector Indian Overseas Bank.

Experts also have a bullish stance on Bandhan Bank

Brokerage firms are quite bullish on Bandhan Bank. Jefferies has given a buy rating to Bandhan Bank shares. Also, the target price has also been increased to Rs 240. Jefferies says that the strong background of the company's new CEO will be positive for the bank. It has also expressed hope of 15 percent ROE in the bank's business. According to Jefferies, the bank's financial performance will be good overall.

However, like most stocks in the banking sector, Bandhan Bank has also been sluggish for some time now. In the last 6 months, Bandhan Bank has given a return of around 13 percent. However, in the last one year, investors have got a negative return of 17 percent from Bandhan Bank.