Financial Daily from THE HINDU group of publications
Thursday, Jul 15, 2004
Financial Daily from THE HINDU group of publications Thursday, Jul 15, 2004 |
||
|
|
||
|
Money & Banking
-
Private Banks Proposal on equity cap in pvt banks unusual move, says HSBC chief Our Bureau
Mumbai , July 14 MR David Eldon, Chairman, The Hong Kong and Shanghai Banking Corporation (HSBC) today termed the RBI's proposal to cap the equity holding (particularly of foreign banks operating in India) in Indian private banks as "an unusual" move." RBI's draft norms, issued recently for discussion, restrict equity holding of one bank in any Indian private banks at 10 per cent. He said having allowed a foreign financial institution to acquire a specific stake in a local bank, it would not be fair to ask it to reduce it later. "It was an unusual move to suggest a cap of 10 per cent," he said. HSBC India had recently acquired 14.6 per cent stake in UTI Bank. Responding to queries from presspersons, Mr Eldon said the proposed regulations, which is currently at a discussion level, if implemented will also limit local banks' ability to raise capital. A significant portion of the profit of many Indian banks comes from treasury income. These banks may not be able to raise their capital requirements, Mr Eldon said. But Mr Eldon said HSBC would send its official views on the proposal to the RBI. He said he is also not in favour of converting the HSBC branch in India to a subsidiary. As a branch, HSBC India can always have the support of its parent, he said. Mr Eldon said HSBC's expansion strategy is based on organic growth though the bank is open to acquisition opportunities. Asked about his view on China's policy in relations to that of India, he said China allows up to 24.9 per cent foreign equity in banks.
More Stories on : Private Banks | RBI & Other Central Banks | Foreign Banks | 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
|