The Reserve Bank of India has cleared the appointment of Rakesh Bhatia as MD & CEO and he has picked up one per cent stake in the bank. He would have paid Rs260 to Rs270 per share. The RBI has also permitted transfer of shares to Yusuffali MA, he must have paid more than Bhatia,'' said S Santhanakrishnan, CSB chairman. The bank board will meet on March 30 to formalise the sale of shares to Yusuffali ,'' said Santhanakrishnan.
In February the Kerala-born Yusuffali MA, who heads the $5.5-billion LuLu group that owns the eponymous hypermarket chain in the Middle-East, had sought the central bank's permission to purchase minority stake in the old private lender from Sura Chanrichawla - the Bangkok-based businessman who controls the single largest bloc of shares in the unlisted bank.
The proposed transaction will help Chanrichawla to bring down his holding in CSB to 13%, from 18% he currently owns. The banking regulator had directed Chanrichawla pare his stake to 10% in the bank by March end in line with RBI norms.
The entry of new investor will help the bank diversify its shareholding when RBI finalises the bank licensing rules. Unlike other banks where investors can freely buy up to 5% equity, any change in CSB's shareholding above 1% requires regulatory approval. Chanrichawla are in talks with investors to divest the remaining 3%. They have sought an extention of 30 days from the regulators to pare their stake to 10%,'' said Santhanakrishnan.
In many old private sector banks, the respective communities have played a role in blocking any change in ownership. In case of CSB, the Church has had a say in the matter.
Some years ago, Archdiocese of Thrissur had prevailed upon the bank's local directors, shareholders and well-wishers to drop a plan to amalgamate the bank with Federal, a larger South-based private lender. The Church wants the 93-year-old bank to preserve its identity.
Yusuffali is from Thrissur itself. So we have local flavour with international experience. We will market our products in Middle East. We will open more ATMs in all Lulu supermarkets,'' said Santhanakrishnan. The bank will also open a representative office in Middle East,'' he said.
The Lulu group, which launched its first supermarket in Abu Dhabi during the first Gulf War, expanded after it entered Dubai in 2000. His group is also in the process of setting up India's largest supermarket in Kochi. While no shareholder other than Chanrichawla ever had a significant stake in the bank, in recent years, a few other corporates have bought shares of CSB.
Edelweiss, the financial services group led by Mumbai-based investment banker Rashesh Shah, also owns 4.99% in the bank while a similar stake is held by two groups each in Delhi and Mumbai. And close to 14% is owned by three Hong Kong-based funds.
The bank has just completed its rights issue and raised Rs96 crore. It is planning to raise another Rs200 crore through private placement by June. It will also launch its initial public offering by September where the bank plans to raise funds in the range of Rs300 to Rs400 crore.
'We are looking at inorganic growth opportunities to increase the bank's balancesheet to about Rs7000 to Rs10,000 crore. The bank is reviewing the books of some non banking finance companies for possible acquisition to grow its balancesheet and footprint across the country,'' said Santhanakrishnan.