Bbl Needs Irda Nod To Pick Up Stake In Vysya

The Bangalore-based Vysya Bank is likely to be the first off the block to increase the foreign holding.

The main promoter -- the GMR Rao group -- is keen to sell its 28.1 per cent holding in Vysya Bank and the Netherland-based ING Bank proposes to enhance its holding in the bank through its subsidiary, Bank Brussels Lambert (BBL).

As ING already has a joint venture with Vysya Bank -- ING Vysya Life Insurance Company -- its move to enhance stake in the bank through the foreign direct investment route would require RBI consulting the application with the Insurance Regulatory and Development Authority (Irda).

BBL is on the verge of merging with ING Bank worldwide. Effectively any enhancement in the shareholding by BBL will increase the ING holding in the insurance venture.

ING may end up holding higher stake in the insurance venture than the permitted 26 per cent cap by way of its holding in Vysya Bank through BBL.

Vysya Bank deputy manager, a BBL executive Bart Hellemans had earlier told Business Standard: "We want to increase our stake to the maximum permissible limit, and have a bigger stake in the management of the bank".

When asked about this development, ING Bank NV chief executive officer Atul Sahasrabuddhe said: "ING's acquisition of Vysya Bank could be just the beginning of the acquisition game, as we see many more serious foreign banks taking the plunge as well".