IndusInd Bank's Hindujas welcome RBI move to allow promoter holding of up to 26%

The Hindujas, who had earlier applied to RBI seeking to increase their holding in IndusInd Bank, on Saturday welcomed the RBI move to allow promoter holding of up to 26 % in private sector lenders. IIHL Mauritius, the Hindujas' entity which is the promoter of IndusInd Bank, had applied to RBI to increase its holding to 26 % from the previous cap of 15 %, seeking parity after promoters of rival Kotak Mahindra Bank were given the permission to have their holding at 26 % after dragging the RBI to courts.

"We believe this measure of increased promoter holding will be of benefit to all stakeholders: the regulator, the banking institution and its clients, particularly at this time when Indian economy is poised for exponential growth," Ashok Hinduja, the chairman of IIHL, said.

The RBI on Friday came out with revised guidelines on private sector banks, allowing for 26 % promoter ownership but did not go ahead with an internal working group's recommendation to allow corporates to promote banks after protests from various quarters including former governors.

Hinduja said IIHL now awaits operational guidelines as it gives the promoters an opportunity to inject capital to increase stake up to 26 %.

The increased promoter holding will lead to enhanced financial strength of the bank and its clients will be protected, he added.

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