Canara Bank, Lic On Prowl For Cdsl Stake

Canara Bank and Life Insurance Corporation of India (LIC) have evinced interest in picking up equity stake in the Central Depository Services (India) Ltd (CDSL). CDSL is also planning a fresh issue of equity to increase its net worth.

CDSL, which is promoted by the Bombay stock Exchange (BSE), Bank of India (BOI), Bank of Baroda (BoB), State Bank of India (SBI) and HDFC Ban, is a facility for holding securities which enables securities transactions to be processed by book entry.

CDSL managing director B G Daga told mediapersons, "Canara Bank will pick up the stake in CDSL from the BSE. The Reserve Bank of India (RBI) has provided in-principal approval to the part transfer of shareholding from BSE to Canara Bank."

 

"In the case of LIC, they would either pick up stake through a fresh issue or through divestment", Daga said. He, however, refused to divulge the stake which both entities were likely to pick up in the depository.

At present, BSE holds around Rs 46.99 crore of the total equity of Rs 104.50 crore. BOI, BoB and SBI each hold Rs 10 crore worth of equity, followed by HDFC Bank, Standard Chartered Bank and Centurion Bank with Rs 7.5 crore each.

Daga explained that they were exploring the possibility of increasing the net worth of CDSL through fresh issue of equity, though their operations were not hampered due to lack of funds. At present, CDSL's net worth of Rs 104 crore is marginally higher than the Securities Exchange Board of India's (Sebi) limit of Rs 100 crore for depositories.

Meanwhile, Global Trust Bank is yet to pick-up equity stake in CDS, though others such as Standard Chartered Bank, Union Bank of India and Calcutta Stock Exchange Association Ltd- who got the approval at the same time- had picked up the stake.

"GTB have already transferred Rs 7.5 crore to the BSE for buying their stake. The formal transfer of stake will take place soon", he said.

Sebi granted approval to the Global Trust Bank, Standard Chartered Bank, Union Bank of India and the Calcutta Stock Exchange to act as sponsors of CDSL on February 5.