The Reserve Bank of India (RBI) in the year 2013 had laid down norms for private sector banks to rationalise the ownership limits. The norms made it mandatory for the promoters to reduce their holdings to 15 per cent within 12 years from the starting date of the banking operations.
While several private sector banks such as IndusInd Bank, Lakshmi Vilas Bank and Yes Bank reduced their stake to 15 per cent, 9 per cent and 20 per cent after the revised guideline of RBI within 3 years (2016), 5 years (2018) and 4 years (2017) respectively, the promoters’ shareholding of Kotak Mahindra Bank (KMB) is 30 per cent as of June 2018.
Interestingly, there is a special differential treatment given to Kotak Mahindra Bank. While, RBI has limited Yes Bank CEO’s tenure until January end 2019, and Axis Bank’s CEO time frame, it has given a special relaxation to the promoter of Kotak Mahindra bank. The Central bank has granted an unusual forbearance to the bank by giving a lengthy time frame to reduce the shareholding – 20 per cent by December 31, 2018 and 15 per cent by March 31, 2020.
Yes, while other bank promoters will have to sell their excess shares now or by end of 2018, Uday Kotak can put off selling his additional shares till March 2020. Surprisingly, this specific relaxation has been given only to the promoter of Kotak Mahindra Bank and not to any other similarly placed private sector bank.
Now, does this extraordinary differential treatment to Kotak Mahindra Bank promoter Uday Kotak much against RBI’s own regulatory prescription fair and just?
Well, this generous dispensation will give monetary benefit to Uday Kotak at the cost to the non-promoter shareholder and the estimated gains is about Rs. 15,609.80 crores. On the contrary, the RBI’s decision has resulted in a loss of Rs.
44 Crore to Yes Bank. Yes, the CEOs and promoters of other private sector banks like Axis and Yes Bank have been caught up in the game of inherent risk of promoters-CEO which makes the differential treatment to Kotak Mahindra Bank even more worse.
Besides, while, KMB seems to be rolling because of the advantage, the RBI’s decision is having an adverse impact on the share prices of these private banks. No wonder, Yes Banks’ share price saw a fall of 29 per cent on September 21 which means witnessing Rs, 20, 937 of market capitalisation going in trash.
The whole scenario of differentiation, does question the stance of the Reserve Bank of India and its unconditional romance with banks like Kotak Mahindra.
buy nolvadex online https://healingtohappy.com/wp-content/languages/new/over/nolvadex.html no prescription
It is time that the central bank avoids being a villain in the eyes of investors as the whole incident is eroding the trust that they have in the regulatory body.
RBI, it is indeed good that you are flexing your muscles, but please imply the force and pressure equally on all areas.
buy finasteride online https://healingtohappy.com/wp-content/languages/new/over/finasteride.html no prescription
Strattera no prescription
Buy Levaquin
Buy Black Cialis
Buy Flomax online
