Religare Enterprises and IDFC on Tuesday announced steps that would qualify them for RBIs new banking licences. The firms have to submit their applications to the RBI by July 1. Shriram Transport said it would take a decision soon.
Religare Enterprises board has asked its promoters to reduce their stake to 49% from the current 71.75%. We are very pleased that they,considering the long-term strategic value of a banking business for Religare,have agreed to dilute their shareholding proactively, Religare Enterprises said in a statement on Tuesday.
Religare promoters have also appointed Axis Capital as their advisor,so that they can find good partners for selling the stake,the statement said. Religare,which has interests in broking,mutual funds,insurance and financial services,is promoted by Malvinder Mohan Singh and Shivinder Mohan Singh,the erstwhile promoters of the troubled pharma company,Ranbaxy.
According to the final guidelines on new banking licences,the banking regulator has said that promoters can hold only 49% stake in the proposed non-operative financial holding company (NOFHC) under which the new bank will be set up. Promoter stake needs to come down to 20% in 10 years and to 15% in 12 years.
Infrastructure finance company,IDFC has also received approval from its board for a new bank licence application,it said in an announcement on Bombay Stock Exchange. The last date for submitting banking licence applications is July 1. Meanwhile,the Shriram Group,which is considered a front-runner for a banking licence,has said while it will apply for the licence,it will take up the banking opportunity only if its current business remains unaffected.
While banking is a logical extension to our current business,we will consider the banking opportunity if it does not hamper our current business, GS Sundararajan,group director,Shriram Group,told FE.
The Chennai-based group had asked RBI for further clarification on the structure of a new banking entity,since it wants to keep its flagship firm,Shriram Transport Finance,out of the proposed banking entity.
However,in its clarification announced on May 31,the central bank had stated that in case of a non-banking finance company converting itself to a bank,all activities which are permitted for a bank should be merged with the new banking entity.
We would still want the bank to be a separate entity from our current business. But it depends on the final structure that RBI encourages after evaluating the applications, Sundararajan said. With the final date for application drawing closer,more players are expected to make similar changes and announcements to adhere to the RBI guidelines.
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