HSBC seeks nod for AMC arm to buy UTI Bank shares

HSBC has sought permission from the central bank for its asset management company (AMC) arm to acquire shares of UTI Bank under its various mutual fund schemes.

This follows HSBC having been permitted to pick up 14.62 per cent stake in the private sector bank on meeting certain conditions laid down by the Reserve Bank of India (RBI).

"The special impositions are a part of the approval from RBI," said HSBC director investment banking V Anand. The central bank stated that neither HSBC nor other HSBC entities can acquire any further shares in UTI Bank without its consent.

Had HSBC not acquired holding in UTI Bank, it would not have had to seek permission from the central bank for transactions with the private sector bank.

Today, RBI has permitted HSBC to continue treasury market activities with UTI Bank, undertake correspondence banking.

It is awaiting RBI approval for acting as the syndicate bank along with Barclays Bank for UTI Bank's forth-coming $ 50 million debt issue, as well as its plans for ATM sharing.

"We have similar relationships with other banks. Approval from the RBI is necessary in the case of UTI Bank because of our stake in the bank," said HSBC group general manager & CEO for HSBC India Niall S K Booker.

HSBC has an agreement for ATM sharing with Punjab National Bank, which does not require RBI approval, said Anand. Approval will also need to be sought for cross-selling of products between the two banks, he added.