homefinance NewsRBI norms: Promoter ownership to impact Kotak Bank, IndusInd Bank, says HDFC Securities
RBI norms: Promoter ownership to impact Kotak Bank, IndusInd Bank, says HDFC Securities
The Reserve Bank of India, on Friday, released the much-awaited modified rules for ownership and corporate structure of private banks in India. 21 recommendations out of the 33 made by the internal working group have been accepted. Krishnan ASV, Lead Analyst-BFSI, HDFC Securities, spoke to CNBC-TV18 about how the new norms will impact IndusInd Bank and Kotak Mahindra Bank.
The Reserve Bank of India, on Friday, released the much-awaited modified rules for ownership and corporate structure of private banks in India. 21 recommendations out of the 33 made by the internal working group have been accepted. The most controversial of the lot, relating to corporate ownership of banks has not been accepted by RBI just yet.
The key change is that the cap on promoters' stake will be raised to 26 percent from the current 15 percent. In an interview with CNBC-TV18, Krishnan ASV, Lead Analyst, BFSI at HDFC Securities, shed light on the new rules.
He said, “So, three broad things- one around the promoter ownership, which probably impacts IndusInd Bank and Kotak Mahindra Bank. Now that the promoters can stay at 26 percent, that means there is no dilution risk in Kotak for sure. At IndusInd, the Hindujas could always look at how to raise the stake further.”
He further mentioned, “Number two is in terms of not allowing corporates yet or at least that’s what it seems like as RBI seems to remain silent on that. I was expecting some moves there because if you want to privatise some of these PSU banks, you want to create a seller's market rather than a buyers’ market. But by restricting the field, unfortunately, you may have a buyers’ market.”
On IndusInd Bank, Krishnan said, “We have reduced stake here. We think there are issues beyond just ownership. Of course, ownership was an overhang as well. The warrant conversion during the last cycle itself took its own sweet time. They needed some RBI forbearance there. But having said that, I don't think ownership necessarily takes away all the risk from IndusInd Bank from an operational perspective right now. I think there are other issues that they need to fix and we remain quite cautious on the name.”
Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
(Edited by : Dipikka Ghosh)
First Published: Nov 29, 2021 11:03 AM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Over 50 onion farmers detained in Nashik ahead of PM Modi's visit
May 16, 2024 11:14 AM
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM