RBI allows Quant Mutual Fund to pick up additional stake in RBL Mumbai

The fund manager through its various schemes already owns 4.68 per cent of the city-based lender which was earlier a cooperative bank as of May 10, 2024.
Image used for representation.
Image used for representation.

Struggling mid-tier private sector lender RBL Bank Tuesday said the Reserve Bank has allowed Quant Money Managers to increase their holdings in the bank to 9.98 per cent.                                          

The fund manager through its various schemes already owns 4.68 per cent of the city-based lender which was earlier a cooperative bank as of May 10, 2024.                                                    

In an exchange filing, RBL said, "the Reserve Bank of India vide a letter dated May 13, has accorded approval to Quant  Money Managers to acquire aggregate holding of up to 9.98% of the paid-up share capital or voting rights in the bank through various schemes of Quant Mutual Fund."

"The approval is subject to compliance with the relevant provisions of the Banking Regulation Act, RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies rules of  January 2023, provisions of the Foreign Exchange Management Act, and any other applicable regulations and guidelines," the filing said. 

Under the conditional permission, Quant can acquire the additional shares in the bank through any of its mutual fund schemes within the next 12 months, that is by May 12, 2025. The RBI letter also said while both parties have to ensure that the shareholding does not go beyond 9.98 per cent, they also have to get prior approval from the regulator if the aggregate holding falls below 5 per cent prior approval of RBI rate they want to increase it to 5 per cent et or more.                                          

It can be noted that after being a quiet cooperative bank for decades the bank under its previous chief executive Vishwavir Ahuja when it was converted as a full-scale commercial bank went on a reckless lending spree, especially through the unsecured side— personal loans and credit cards. As a result, these books ballooned and so did the asset quality. Finally, this led to the forced exit of Ahuja from the bank and the appointment of an RBI representative on its board. 

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