LuLu group chief Yusuffali MA seeks RBI nod to buy 4.99 pc stake in Catholic Syrian Bank
One of the richest Indians in the Gulf is knocking on the doors of the Reserve Bank of India(RBI) to buy a minority stake in Thrissur-headquarteredCatholic Syrian Bank (CSB).
Kerala-born Yusuffali MA, who heads the $5.5-billionLuLu group that owns the eponymous hypermarket chain in the Middle-East, has sought the central bank's permission to purchase 4.99 per cent equity 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 closer to the 10 per cent cap set by RBI, from 18 per cent he currently owns.
"I'm not a banker and I have no intention to control the bank... But if RBI allows, I will consider buying another 3 per cent," Yusuffali told ET over telephone. As on March 31, 2012, the bank had an asset base of Rs 12,047 crore and recorded a net profit of Rs 25.9 crore.
The banking regulator, which has the last word on who owns and controls a bank, has extended the deadline to March 31 for Chanrichawla to lower his stake to 10 per cent or below.
A diversified shareholding will make it easier for CSB, which has often been on the radar of bigger banks and corporates, to raise capital.
It will also help the bank attract new investors as and when RBI finalises the bank licensing rules. Unlike other banks where investors can freely buy up to 5 per cent equity, any change in CSB's shareholding above 1 per cent requires regulatory approval.
"The board is backing Yusuffali... The bank is also appointing a new managing director," said CSB Chairman S Santhanakrishnan.
The grapevine has it that Rakesh Bhatia, a senior official of HSBC, has been offered the job. Bhatia, who has worked with HSBCIndonesia and Hong Kong, may pick up a 1 per cent stake in CSB.
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, a son of the soil, foresees no opposition to his proposal from the Church and the local community. "I also come from the same district (Thrissur). I don't want to run the bank and I too feel the bank should retain its name and identity," said the LuLu group managing director, who moved to Abu Dhabi in 1973 to join his family's trading business.
The group, which launched its first supermarket in Abu Dhabi during the first Gulf War, expanded after it entered Dubai in 2000.
Source : ET BUREAU
One of the richest Indians in the Gulf is knocking on the doors of the RBI to buy a minority stake in Thrissur-headquartered Catholic Syrian Bank.
One of the richest Indians in the Gulf is knocking on the doors of the Reserve Bank of India(RBI) to buy a minority stake in Thrissur-headquarteredCatholic Syrian Bank (CSB).
Kerala-born Yusuffali MA, who heads the $5.5-billionLuLu group that owns the eponymous hypermarket chain in the Middle-East, has sought the central bank's permission to purchase 4.99 per cent equity 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 closer to the 10 per cent cap set by RBI, from 18 per cent he currently owns.
"I'm not a banker and I have no intention to control the bank... But if RBI allows, I will consider buying another 3 per cent," Yusuffali told ET over telephone. As on March 31, 2012, the bank had an asset base of Rs 12,047 crore and recorded a net profit of Rs 25.9 crore.
The banking regulator, which has the last word on who owns and controls a bank, has extended the deadline to March 31 for Chanrichawla to lower his stake to 10 per cent or below.
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It will also help the bank attract new investors as and when RBI finalises the bank licensing rules. Unlike other banks where investors can freely buy up to 5 per cent equity, any change in CSB's shareholding above 1 per cent requires regulatory approval.
"The board is backing Yusuffali... The bank is also appointing a new managing director," said CSB Chairman S Santhanakrishnan.
The grapevine has it that Rakesh Bhatia, a senior official of HSBC, has been offered the job. Bhatia, who has worked with HSBCIndonesia and Hong Kong, may pick up a 1 per cent stake in CSB.
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, a son of the soil, foresees no opposition to his proposal from the Church and the local community. "I also come from the same district (Thrissur). I don't want to run the bank and I too feel the bank should retain its name and identity," said the LuLu group managing director, who moved to Abu Dhabi in 1973 to join his family's trading business.
The group, which launched its first supermarket in Abu Dhabi during the first Gulf War, expanded after it entered Dubai in 2000.
According to Yusuffali, who is on the boards of Infrastructures Kerala Ltd (InKEL) and Cochin International Airport Ltd among other organisations, the group was 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 per cent in the bank while a similar stake is held by two groups each in Delhi and Mumbai. And close to 14 per cent is owned by three Hong Kong-based funds.Source : ET BUREAU
