NRI businessman Surachan Chawla -- the single largest shareholder in Kerala-based Catholic Syrian Bank -- has approached the Reserve Bank seeking a two-year extension to transfer his 14.5 per cent stake in the private sector bank.
Earlier, RBI had asked Chawla, who currently holds a total 24.5 per cent stake in CSB, to bring down his holding to 10 per cent by March 31, 2010, as existing RBI regulations does not permit any single investor or a group to hold more than 10 per cent stake in any bank.
The central bank had given extension several times to the Bangkok-based businessman to reduce his shareholding to the permissible level. In his latest request, Chawla has asked time till March 31, 2012, to sell the excess stake and thereby bring down the holding to 10 per cent, a top CSB official on the condition of anonymity told PTI.
According to the official, a bid to sell the additional shares to nearly 15 investors in March this year did not materialise as many of the prospective investors did not meet the eligibility criteria. Following this, the apex bank sought more details about the buyers. Chawla was planning to sell less than one per cent stake to each of the investors.
"RBI asked for more clarifications about some of the investors. Investors were asked to seek further approvals from RBI before bidding for Chawla's stake. Following this, these investors have withdrawn their proposal," CSB Director C K Gopinath said.
Three Mauritius-based private equity funds AIF Capital, Garfmore Private Equity and Siguler Guff together hold about 15 per cent in CSB. Other major stakeholders of the lender are engineering major L&T and Edelweiss, who together have 5 per cent. Federal Bank also holds 5 per cent stake, while a group of local investors together hold around 15 per cent.
Last year, Kochi-based Federal Bank had expressed its interest to take over the unlisted CSB, but the move did not take off following differences over valuations.
After Federal Bank announced its plan to take over CSB, the Syrian Catholic Church in general and the Thrissur Archdiocese, in particular, were riled at the move and were very vocal in opposing it.
Thrissur-based Catholic community under the chairmanship of archbishop, had formed an action committee and received commitments for around Rs 250 crore to buy Chawla's shares and, thereby, ensure control of the lender.
As at end March 31, CSB has total deposits and advances at Rs 6,332 crore and Rs 3,683 crore respectively. The lender has 363 branches and a staff strength of 2,676. Its capital adequacy ratio is 12.29 per cent, staff 2,676.
