RBI expected to bail out HDFC and ICICI from FDI norms
by 19, April, 2010 0 |
HDFC and ICICI Bank are facing hard time with the new FDI norms that declares them foreign banks. Now the RBI is expected to bail out these banks.
It is possible that the central bank would shortly be sending out a directive which would categorize these banks as “foreign-owned Indian banks”. This move by RBI would go against the position of the Department of Industrial Policy and Promotion (DIPP) that any company having over 51% of its shares held by foreign investors should be regarded as a foreign company.
Other banks such as ING Vysya Bank, IndusInd Bank and Yes Bank are also regarded as foreign banks. But they defend themselves saying that regardless of the equity share, most of the voting rights remain with Indians.
The subject came into focus with ICICI and HDFC Bank filing complaints against RBI and Finance Ministry about the new FDI norms and asked for clarifications.
Foreign stakes in these banks are 77 and 64% respectively.
The prime fear of these banks is that if they are included in the list of foreign firms then their investments would be impacted as various sectors have limits on the amount of FDI permitted in them, the major one being insurance.
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