RBI approves Fairfax's acquisition of 51 percent stake in CSB

Prem Watsa-led Fairfax Financial Holdings has received Reserve Bank of India (RBI)'s approval to acquire up to 51 per cent stake in Kerala-based Catholic Syrian Bank (CSB), according to sources.

It is for the first time that RBI has allowed a bank to sell its majority stake to a single private investor.

The transaction value is not known. While Fairfax will have 51 per cent stake, its voting rights will be capped at 15 per cent. The bank had earlier said it was expecting to get the proposed fund infusion by Fairfax Financial Holdings by March next year.

There were also reports that Fairfax had approached RBI evincing interest in investing Rs 1,000 crore in an Indian bank. The central bank, in turn, forwarded Fairfax’s proposal to CSB, which accepted it. CSB officials had said earlier that the in-principle approval from the banking regulator was expected by December and that it could finish other procedures within 90 days thereafter.

The proposed Rs 1,000 crore investments will allow CSB to increase its assets 10 times. The bank’s focus will be on small and medium enterprises, gold, and retail, while it may not be aggressive on corporate lending.