The Hindu Business Line : ICICI Bank awaits RBI norms to decide on stake cut

ICICI Bank will take a view on reducing its stake in Federal Bank and South Indian Bank once the RBI's guidelines on ownership of private banks are finalised.

"If the guidelines are adopted and if the RBI asks us to bring our holding below 5 per cent in both these banks, we will comply within an appropriate timeframe," said Ms Kalpana Morparia, Deputy Managing Director, ICICI Bank.

Ms Morparia said since both the holdings were purely for financial investment, ICICI Bank will have no problem in cutting its stakes in these banks, if need be.

Currently, ICICI Bank has a 20 per cent stake in Federal Bank and about a 10 per cent holding in South Indian Bank.

RBI's `draft' guidelines on the ownership and governance of private banks restricted the holding of an operating bank in a private bank to a maximum of 5 per cent. Among the other private banks in which promoters may have to bring down their majority holding once the RBI's guidelines are finalised are Kotak Mahindra Bank, IndusInd Bank, HDFC Bank, Bank of Rajasthan, Bank of Punjab, Dhanalakshmi Bank and Yes Bank.

RBI has said it received several suggestions and queries from market participants and the media on its draft guidelines, based on which it will place a second draft of the policy in the public domain.

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