Financial Daily from THE HINDU group of publications
Thursday, Feb 12, 2004
Financial Daily from THE HINDU group of publications Thursday, Feb 12, 2004 |
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ESOPs Money & Banking - IPOs No exposure cap for bank advances for ESOP, IPO Our Bureau
Mumbai , Feb. 11 BANK advances to its employees for subscribing to its own ESOP or IPOs will be exempted from its overall exposure limit to the capital market. The Reserve Bank of India has stated that while extending bank finance to employees for purchasing shares of their own company either under ESOP or IPO of companies, banks may take their own decisions subject to existing regulations including margin on IPO financing. All loans, except to its own employees, under this category are to be treated as banks' exposure to capital market within the overall ceiling of 5 per cent of banks' total outstanding advances as on March 31 of the previous year. Bank finance to assist employees to buy shares of their own company under the employees' quota is restricted to Rs 50,000 - or six months' salary of the employee, whichever is less
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