IndusInd Bank surges 5% on RBI's panel proposals on bank ownership

NEW DELHI: Shares of IndusInd Bank surged 5 per cent in Monday's trade on hopes the promoters could increase their stake in the bank if the suggestions by the RBI's special committee report are implemented.

The Internal Working Group has recommended a staggered increase in primary ownership, allowing bank promoters to hold 26 per cent over 15 years from the current threshold of 15 per cent.

It has also spoken in favour of allowing industrial houses as bank promoters with legislative changes to the banking regulation act.

IndusInd promoters were seeking to increase shareholding in the lender, and one of the suggestions of the panel allows existing promoters to raise ownership.

Following the development, the stock rose 5.18 per cent to hit a high of Rs 852.05 on BSE.

The promoters of IndusInd Bank,IndusInd International Holdings, owned largely by the four Hinduja brothers, had requested the RBI in March this year to allow them to raise their stake in the bank.

This was after the regulator had allowed Kotak Mahindra Bank promoter Uday Kotak to hold 26 per cent in the bank.

Hinduja also said that shareholder equity has to be the first line of defence in a robust banking system.