Chawla asks RBI for 2-year extension to reduce CSB stake

NRI businessman Surachan Chawla — the single largest shareholder in Kerala-based Catholic Syrian Bank (CSB) — has approached the Reserve Bank seeking a two-year extension to transfer his 14.5 per cent stake in the private sector bank.

Earlier, RBI had asked Chawla, who currently holds a total 24.5 per cent stake in CSB, to bring down his holding to 10 per cent by March 31, as existing RBI regulations do not permit any single investor or a group to hold more than 10 per cent stake in any bank.

The central bank had given an extension several times to the Bangkok-based businessman to reduce his shareholding to the permissible level. In his latest request, Chawla has asked time till March 31, 2012, to sell the excess stake and thereby bring down the holding to 10 per cent, a top CSB official on the condition of anonymity said.

 

According to the official, a bid to sell the additional shares to nearly 15 investors in March this year did not materialise as many of the prospective investors did not meet the eligibility criteria. Following this, the apex bank sought more details about the buyers. Chawla was planning to sell less than one per cent stake to each of the investors.

“RBI asked for more clarifications about some of the investors. Investors were asked to seek further approvals from RBI before bidding for Chawla’s stake. Following this, these investors have withdrawn their proposal,” CSB Director C K Gopinath said.