INSUBCONTINENT EXCLUSIVE:
MUMBAI: Central Bank of India sold its 4% stake in Clearing Corporation of India (CCIL) for about Rs 118 crore early
this week,
according to people aware of the deal
ICICI Lombard General Insurance has acquired the stake from the struggling public sector bank, they said.
Central Bank is currently under
the Reserve Bank of India’s prompt corrective action (PCA) framework, which entails strict curbs on business growth and capital
consumption.
The bank had earlier announced its intention to sell its non-core assets to raise funds
It is planning to raise another Rs 270 crore by raising equity capital through employee stock option.
The bank’s shares lost 2.62% on the
Bombay Stock Exchange in Friday’s trade to end the session at Rs 33.50
Its stock has declined 54% in the past one year.
For nine months ended December 31, 2018, the bank reported a loss of Rs 3,164 crore, higher
than a loss of Rs 2,991 crore posted for the year-ago period.
Queries emailed by ET to Central Bank of India and ICICI Lombard did not
elicit any response till press time.
In March 2018, Central Bank had sold 3.11% stake in JM Financial Asset Reconstruction Company
In November, Bank of Baroda sold its 4% stake in CCIL to HDFC Bank for an aggregate sum of Rs 124 crore.
Early last year, ICICI Bank had
acquired an additional 4.4% stake in CCIL for Rs 143 crore.
ICICI Bank and HDFC Bank own 9.9% and 9% stake in CCIL, respectively.
A single
shareholder cannot hold more than 10% stake in any clearing corporation and shareholder together with the shareholding of its holding,
subsidiary or associate companies cannot exceed 15% of the paid-up equity, according to the Securities and Exchange Board of India
regulations.
CCIL, incorporated in 2001, is engaged in the business of clearing and settlement services for transactions in the money
market, government securities market and foreign exchange market, among other related financial activities.
At the end of March 2018, SBI
held 16.8% stake in CCIL while LIC and STCI Finance held 10% stake each
IDBI Bank reduced its stake to 2.5% from 7.5% between March 2017 and March 2018.
