RBI liberalises shares issue norms
By Our Banking Bureau | 21 Mar 2002
Also, the bonus issue will now be delinked from the rights issues, the RBI said; its approval will be necessary for initial public offerings and preferential shares. Banks will also be free to price their subsequent issues once their shares are listed on stock exchanges.
While detailing the pricing norms, the RBI has stated that the price should be based on the merchant bankers recommendation. The pricing of preferential issues by listed banks may be as per the formula of the Securities and Exchange Board of India (Sebi), while for unlisted banks a chartered accountant or a merchant banker may determine their fair value.
In the case of pricing of issues, where RBI approval is not required, the pricing should be as per Sebi guidelines. In cases where the prior approval of the apex bank is required, pricing should take into account both Sebi and RBI guidelines, an RBI statement said.
Banks will, however, have to meet Sebis requirements while issuing bonus shares.