Fairfax Financial buys 51% stake in Kerala-based Catholic Syrian Bank
This is the first time the central bank has allowed a bank to sell majority stake to a single private investor.
Fairfax Financial Holdings on Friday received the Reserve Bank of India's approval to acquire 51% stake in Kerala-based Catholic Syrian Bank, a Bloomberg report said.
As per the report, the casualty insurance and reinsurance management company, Fairfax, is required to keep bank shareholding for at least five years. However, the company must cut the bank's shareholding to 15% within 12 years.
Reportedly, this is the first time the central bank has allowed a bank to sell majority stake to a single private investor.
According to a Business Standard report, earlier, the bank was expecting funds from Fairfax by March 2017. However, Fairfax approached to the RBI showing interest of investing Rs 1,000 crore in an Indian bank. Finally, the RBI gave the Fairfax's proposal to CSB.
The proposed Rs 1,000 crore investment will allow CSB to increase its assets 10 times, the report said.