[sbinews] Indus Ind Bank

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Tue, 23 Dec 2003 07:15:04 +0500

RBI tells IndusInd to change holding co's stake into FDI 

MUMBAI: The Reserve Bank of India (RBI) has asked promoters of IndusInd Bank — 
the Hindujas, to change the stake held by the holding entity, IndusInd 
International Holdings (IIHL) into foreign direct investment (FDI), if they 
seek to raise their equity stake in the private bank. 

The Hindujas had approached RBI to raise their holding in the bank to 49%. At 
present, the Hindujas-controlled IIHL holds 41.3% stake in the bank. It is an 
overseas corporate body (OCB). 

OCBs are currently barred by the RBI from buying equity from both primary and 
secondary markets. Though the regulator is silent on the current status of 
IIHL’s stake, any further purchases of the bank’s shares by the promoters would 
require conversion of IIHL’s stake in the bank into FDI and permission from 
FIPB for hiking the stake. 

“In any case, the promoters are not in a rush to raise their stake,” said 
sources. The promoters want to hike their holding through purchase of shares 
from the secondary market, the sources added. 

This is the first instance when the RBI has directed a bank to convert an 
existing OCB holding into FDI for the purpose of raising stake by promoters. 
Recently, IndusInd Bank’s board gave an ‘in-principle’ approval to acquire 
another group company Ashok Leyland Finance. 

Sources said that the OCB status of IIHL is not a problem for the moment, since 
this entity (registered in Mauritius ) is owned by non-resident Indians (NRIs), 
which are exempted from the RBI’s ban on OCBs. 

Recently, the promoters merged IEFL, an erstwhile holding entity, with the 
bank. Ahead of the merger, IEFL held 24.9% in the bank and IIHL 25%. IIHL held 
51% of IEFL, while 49% was held by minority shareholders. Current regulations 
allow domestic promoters to hold up to 49% in private banks. The government is 
likely to hike this ceiling to 74% shortly. 

Mailing list (sbinews@xxxxxxxxxxxxx) related information:

News/articles about SBI and Banking related matters published  in the print 
media, Internet etc will be circulated through this Mailing List. 

The messages in this list will help in improving awareness of SBI and its 
activities vis-a-vis the happenings in the Banking industry. This should be of 
help to all staff members of SBI, particularly those who are preparing for 
promotional written tests/interviews/group discussions. Subscription to this 
Mailing List is simple and FREE. Please check the procedure below. Please share 
this information with other colleagues/branches that could be interested in 
subscribing to this Mailing List. 

The messages circulated here should not be deemed to have the official 
endorsement of the SBI or any of its employees. The correct factual position 
may be ascertained from official sources. 

To join this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx 
with the word 'subscribe' without the quotes in the subject of the email 

To leave this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx 
with the word  'unsubscribe' without the quotes in the subject of the email 

Archives (old messages) are available for viewing at:
Click on the month-year at the lower left corner to view messages posted during 
that month. 

This is an announcements/newsletter type mailing list i.e. only the Moderator/s 
can post messages to the list. 

This mailing list is maintained and moderated by Sri. R.S.Pai, currently 
working as Chief Manager(IT-Internet Banking), SBI, Corporate Centre, Mumbai. 
Moderator: Smt. S. Vijaya, CM (Training), SBI, STC, Bangalore.
Visit http://rspai.tripod.com for some useful Banking, Reference and Utilities 

Other related posts:

  • » [sbinews] Indus Ind Bank