Financial Daily from THE HINDU group of publications
Tuesday, Apr 06, 2004
Financial Daily from THE HINDU group of publications Tuesday, Apr 06, 2004 |
||
|
|
||
|
Home Page
-
RBI & Other Central Banks Money & Banking - Private Banks Hindujas follow RBI diktat — IndusInd Bank to bring down holding in IT arm to 30 pc Ambarish Mukherjee
New Delhi , April 5 THE Hindujas are restructuring IndusInd Bank's holding in the group's information technology outfit following a diktat from the Reserve Bank of India. IndusInd Bank will bring down its holding in IndusInd Information Technology Ltd (IITL) from the existing 80 per cent to 30 per cent by offloading the stake in favour of the Mauritius-based promoter company, IndusInd International Holdings Ltd (IIHL), under a diktat from the RBI. IITL was originally set up by hiving off the information technology division of the bank into a separate company for providing IT services to the banking industry, in general, as well as to function as a key IT services provider for the bank itself. IndusInd Bank originally had a 30 per cent stake in the group's technology outfit while another group company, IndusInd Enterprise and Finance Ltd (IEFL), held another 50 per cent. Hinduja TMT held the remaining 20 per cent. Following the merger of IEFL with IndusInd Bank, the bank's holding in the information technology company went up to 80 per cent. Last year, the RBI asked the Hinduja family-controlled bank to bring down its stake to the original 30 per cent level, stating that "under the Banking Regulations Act, 1949, no banking company is allowed to hold shares in any company, whether as pledge, mortgage or absolute ownership of an amount exceeding 30 per cent of the paid-up capital of the company or 30 per cent of its own share capital and reserves, whichever is less." Sources said that the bank has already crossed the deadline set by the RBI to bring down its stake. Initially the RBI has asked the bank to reduce its stake to permissible levels by the end of October 2003. It is only recently that the bank finally decided to reduce its holding and approached the Foreign Investment Promotion Board seeking permission to sell the stake to its promoter company. It has received the board's clearance. Now the deal, valued at Rs 1.15 crore, is likely to be closed soon, sources said.
More Stories on : RBI & Other Central Banks | Private Banks | Information Technology | Mergers & Acquisitions
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|