Centurion Bank, which has been on the looking out for a buyer to sell a part of the promoters' stake in the bank, may decide to swap the holdings by Asian Development Bank (ADB) and IFC with a foreign bank. This will enable foreign banks to have a larger stake in Centurion Bank.
"IFC and ADB together hold around 18 per cent. However, there is little scope to offer a substantial holding to a foreign bank as Keppel also holds a stake. The total FDI limit is capped at 49 per cent. The bank may decide to swap the stake of a multilateral agency with a foreign bank," sources said.
The new generation private sector bank has attracted a number of suitors -- HSBC, ABN Amro, Citibank and Bank Muscat -- which have undertaken due diligence process.
Centurion Bank is likely to offer more than 26.2 per cent stake to the strategic partner. This is the block of shares owned by TCFC Finance Ltd (TFL), which translates into 4 crore shares with a face value of Rs 40 crore.
20th Century Finance Corporation (TCFC), which merged itself with the bank in 1998, had an agreement with TFL that the investment company would have a liability of a maximum of Rs 40 crore to make good the incremental provisioning on account of non-performing assets (NPAs).
The cumulative provisioning till March 31, 2001, was to the tune of Rs 29.92 crore and the estimated provisioning this year is pegged at Rs 10.08 crore, thereby bringing the total provisioning to around Rs 40 crore.
