Centurion alters fund infusion proposal

 The bank had earlier applied to the Foreign Investment Promotion Board (FIPB) seeking a temporary breather for breaching the 49 per cent cap of FDI into the bank.

 Now it plans to bring down the foreign fund infusion to the permissible limit and raise the funds through the FII route.

 When contacted, Centurion Bank chairman and managing director V Jankiraman refused to comment on the development but said the bank has not got any response from FIPB.

 As the bank is now re-working its capital infusion plan to comply with the existing FDI and FII provisions, it will no longer need the FIPB approval, said a banking industry source.

 Under the present guidelines, investments through both FII and FDI routes are capped at 49 per cent each.

 Sabre Capital Investor Group and BankMuscat, along with existing investors of the bank, will bring Rs 154 crore in the first tranche into the bank. In the next phase, there will be a Rs 65 crore public-cum-rights issue.

 According to the original plan, after the first phase, the FDI stake in the bank would have increased to around 61 per cent. This would have come down to below 49 per cent after the rights issue.

 Now, Sabre Capital and other investors are likely to invest in Centurion Bank through the FII route while Bank Muscat will take the FDI route.

 Bank Muscat will invest Rs 75 crore in Centurion Bank. This includes the merger of its Bangalore branch operations.

 The major foreign stakeholders in the bank are Keppel (around 17.71 per cent) and ADB (10.22 per cent). IFC