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Vinson Kurian

Thiruvananthapuram, Sept. 2 Catholic Syrian Bank is seeking shareholders’ approval for inviting NRI investments not exceeding 24 per cent of the paid-up capital.

The Kerala-based private sector bank is also proposing to raise additional capital by preferential allotment or through private placement to one or more NRI/FIIs, Qualified Institutional Buyers or other eligible investors.

These are among the major businesses to be transacted at the 87th Annual General Meeting to be held on September 26 at Thrissur, a notice issued to the shareholders said.

While the Reserve Bank of India has restricted individual and aggregate NRI investments in private sector banks to five per cent and 10 per cent respectively, the latter can be raised to 24 per cent with the approval of the board of directors or general body.

No individual NRI shareholder holds five per cent of the bank’s paid-up capital. But individual members of the Thailand-based Siam Vidhya Group (SVG) have been permitted by the RBI to hold up to 10 per cent on a long-term basis.

Combined with the other existing retail NRI shareholders who hold a cumulative 1.10 per cent, the aggregate NRI holding would exceed 10 per cent. The bank is now anticipating further acquisition of shares by NRI investors, which calls for a rejig of the shareholding pattern.

It is in this context that an enabling resolution is sought to be moved for shareholder approval for permitting aggregate NRI investments up to 24 per cent, the maximum allowed by the regulator.

The bank also needs additional capital to shore up the net worth and further strengthen the capital adequacy. This explains the move for going in for a preferential allotment and/or private placement.

The board of directors has recommended a 30 per cent dividend for the year 2007-08.

More Stories on : Private Banks | Private Placement | NRIs

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