Kochi:
A clutch of Kerala-based private banks Federal
Bank, South Indian Bank, Dhanalakshmi Bank, Catholic Syrian
Bank and Lord Krishna Bank are back in news following
the central governments decision to remove the 10-per
cent ceiling on voting rights of private and foreign investors
in Indian banks.
The
move to abolish the limit is aimed at attracting foreign
direct investment (FDI) in the banking sector and this
will revive investor interest in these banks, say industry
officials.
Till
now, even if the foreign stakeholder had a 40-per cent
stake in an Indian bank, only 10 per cent voting rights
were allowed. As per the new proposal, which now awaits
the amendment of the Banking Regulation Act, 1949, during
the Indian parliaments post-recess budget session,
the actual shareholding will be taken as voting rights.
But
we dont see any hostile corporate raiders in the
banking sector as any acquisition over 5 per cent still
requires a Reserve Bank of India (RBI) approval,
says Federal Bank chairman K P Padmakumar. ICICI Bank
holds 21 per cent in Federal Bank and has been enjoying
voting rights for the 21 per cent through a special provision.
In Federal Banks case, we dont see a
major change, Padmakumar adds.
But
the same situation may be different in South Indian Bank,
which also, like Federal Bank, is listed on stock markets,
and ICICI Bank, the single largest shareholder. With ICICI
Bank holding an 11-per cent stake (and voting rights for
just 10 per cent), it may not be surprising if ICICI Bank
increases its stake in the Thrissur-based South Indian
Bank.
The
third stock market-listed private sector bank, Dhanalakshmi
Bank, too may attract investor interest, after the amendment
of the Act shortly, say stock broking sources. South Indian
Bank chairman A Sethumadavan could not be contacted as
he was out of station while Dhanalakshmi Bank executive
director K A Menon refused to comment.
Sources
say the removal of ceiling on voting rights may also attract
FDI interest in Catholic Syrian Bank (CSB), where Indonesia-based
non-resident Indian Chamsrich Chawla is embroiled in an
acquisition battle. With higher voting rights, there
is a possibility of Chawla trying to find some buyer for
his stake in CSB, says an official with a prominent
broking firm. CSB officials, however, say the Chawla issue
hasnt been solved as yet and added that they dont
foresee a threat of control.
Though
the central government had earlier hiked the FDI limit
in Indian banks from 49 per cent to 74 per cent sometime
back, there is no considerable interest in banking stocks
as the voting rights remain at 10 per cent. Now
there could be a revival in banking sector stocks soon,
say broking officials.
In
the case of Lord Krishna Bank, the sources add that there
could be an active interest in foreign and private banks
when the Kochi-based bank comes out with its maiden public
issue, which is pending for some time now.
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