CSB capital mop-up plan delayed further

Catholic Syrian Bank's (CSB) capital raising plans are likely to be further delayed with the Reserve Bank of India (RBI) asking the bank to first seek the approval of the Foreign Investment Promotion Board (FIPB) for its proposed private placement of equity shares.

CSB had applied to the RBI for permission to privately place about 15 per cent stake in the bank for about Rs 35 crore with investors from Mauritius.

The RBI has written a letter to CSB saying that it needs to get approval from FIPB before approaching the central bank for clearance, according to a top official of the bank.

CSB has been in talks with Mauritius-based investors for privately placing shares in order to mobilise Rs 35 crore in the first phase of its Rs 100 crore capital raising plan to enhance its net worth to the minimum required Rs 300 crore.

The bank was planning to complete the formalities with regard to private placement by the end of the current year, but the latest direction from the RBI is likely to jeopardise the plan.

The capital raising plans of CSB were first delayed because of restrictions put by the Company Law Board following a petition filed by some shareholders. CLB gave the go ahead in August 2006.