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Thrissur, Kerala-based Catholic Syrian Bank is seeking shareholder approval for raising foreign institutional investor limit up to 49 per cent.
According to guidelines of the Reserve Bank, the individual and aggregate FII investments in private sector banks are restricted to 10 per cent and 24 per cent of the paid-up capital respectively.
But aggregate FII investment limit can be raised to 49 per cent with the approval of the board of directors or a general meeting.
The present FII holding in Catholic Syrian Bank (CSB) is 14.99 per cent.
An ordinary resolution seeking approval for raising this to not exceeding 49 per cent will be moved at the 90{+t}{+h} CSB annual general meeting to be held in Thrissur on September 29.
Separately, a special resolution will be moved for permission to authorise the board of directors to raise additional capital by a preferential share issue or through private placement.
The bank needs additional capital to shore-up the net worth and also to strengthen capital adequacy.
The board is considering the option of going in for a preferential allotment or private placement to eligible investors. Details will be finalised in due course, subject to RBI approval.
Another resolution sought to be moved is a proposal to amend the Objects Clause to enable the bank to set up subsidiary companies.
According to Section 19(1) of the Banking Regulation Act, 1949, a banking company can form subsidiaries to undertake any business permitted under statutes. The bank might be interested in promoting subsidiaries to undertake businesses other those provided for in the Object Clause, and hence the proposed amendment. But this would be only enabling in nature.
Catholic Syrian Bank has also proposed a comprehensive revision of Articles in order to support and take care of growth plans and internal regulatory mechanism. A special resolution will be moved to seek shareholder approval.
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