L&T Capital Holdings, HSBC Financial Services,India Capital Fund and GMR Group of Companies have emerged as the top shareholders in four out of the six old generation private sector commercial lenders based in the South. Five out of these six banks do not have any major domestic or foreign promoters. Only in Karur Vysya Bank,promoters hold a meager 3.57% stake.
The Reserve Bank of India (RBI) has recently published a a discussion paper on the new ownership structure for the old generation private sector banks. The guidelines,when comes into effect after detail deliberations,is expected to trigger a new wave of consolidation in the banking industry. Many corporate houses,including L&T and GMR,have an eye on the half a dozen old generation commercial lenders in the South that do not have any promoters.
As per the latest filings with the regulators,L&T Capital Holdings top the list of shareholders in City Union Bank with a stake of 4.8% while HSBC Financial Services is the top shareholder in Karnataka Bank,holding 4.48% stake. India Capital Fund,with a 9.07% stake,is the single largest shareholder in Thrissur-based South Indian Bank while the GMR Group of Companies,with a 4.95% stake,is the single largest shareholder in Karur Vysya Bank. Promoters hold 3.57% stake in KVB.
Similarly,the International Finance Corporation,the industrial lending arm of the World Bank,is holding a tad lower than 5% stake in Kochi-based Federal Bank. P Rajamohan Rao holds 9.68% stake in Dhanlaxmi Bank. Rao was asked to bring his holdings to below 10% by the apex bank some time back.
State-run Power Finance Corporation last month said it is keen to either acquire or pick up a majority stake in one of the existing banks once RBI spell out the new norms for the ownership structure. Others like Sriram Group and Srei Infrastructure Finance are also keen to enter the banking space once the new rules come into effect.
According to industry sources,RBI is likely to allow business houses with a well-diversified shareholding pattern to enter the commercial banking space.