Foreign banking major HSBC said on Thursday that it will decide on hiking its 14.6 per cent stake in UTI Bank after the government comes up with a policy on foreign direct investment and voting rights.
"UTI Bank is a good bank... Once new regulations and Reserve Bank of India guidelines come up, we will decide on it (hiking stake or not)," Niall Booker, chief executive officer, HSBC India, said on the sidelines of 'Euromoney conference' in New Delhi.
The RBI in its draft norms has envisaged that foreign banks will be allowed to hike their stake in Indian banks by 5-10 per cent while the previous National Democratic Alliance government had allowed 74 per cent foreign holding in private banks.
"The big jigsaw is how to go there (74 per cent holding)," he said referring to the lack of clarity in government and RBI policies.
Booker welcomed finance minister P Chidambaram's recent statement on raising voting rights of foreign investors and hoped that the government would come up with the norms soon.
He said there are three ways in which foreign banks can expand their presence in India- branch expansion, setting up a local subsidiary, and buying a private bank.
Since the new RBI norms disfavour foreign banks' hiking their holding beyond 5-10 per cent in a year, Booker said, "It is unpalatable to make a choice (of buying a private bank) with 5.0 per cent hike in holding." He hastened to add, "We are not ruling out anything or ruling in anything."
