Page 5 - Banking Finance December 2022

BANK UPDATE

Banking

News

Government to sell 1.55% valid the contention Kochhar that once banking term deposits or the same for
there is cessation of employer and savings account deposits have been ris-
stake in Axis Bank
employee relationship then the accep- ing gradually but continuously over the
The Government is planning to sell a tance of early retirement cannot be last few years.
1.55% stake in Axis Bank through an revoked.
Data shows that the ratio of small sav-
offer for sale, a government invest-
"Prima facie, I find that the revocation ings deposits to bank deposits has
ment vehicle, the Specified Undertak-
of the early retirement acceptance is inched up from 4.4% in FY17 to 5.8%
ing of the Unit Trust of India, said.
valid and do not find, given the facts in in FY22. "While the share is still very
SUUTI will sell 46.5 million shares in the present case, any merit in the con-
low, the gradual rise is significant," the
Axis Bank representing 1.55% of its tention on behalf of Mrs. Kochhar that
report said.
equity, it said. once there is cessation of employer and
employee relationship, then accep-
The floor price for the offer is 830.63 India pushes Rupee trade
tance of early retirement cannot be
rupees per share, it added.
revoked", said a single judge bench of beyond Russia
Based on shareholding data available
Justice R I Chagla. On the lines of an arrangement being
on the Bombay Stock Exchange, SUUTI
worked out with Russia, India is in talks
held a 1.55% stake in the bank, sug-
Small savings rise by Rs. with Sri Lanka, the Maldives and mul-
gesting it will completely exit this via
tiple south east Asian, African and
the offer for sale. 4.6 trillion
Latin American countries to initiate
In February this year, small saving de-
The shareholding was transferred to trading in the Indian Rupee.
posits stood at Rs. 9.9 trillion, which is
the investment vehicle in 2003 when
The countries in these geographies
only a small fraction of SCB deposits
a scheme of the Unit Trust of India
that totaled to Rs. 170.2trillion, as per have shown interest in opening Special
failed and was bailed out.
a report by Bank of Baroda. Rupee Vostro or SRV accounts. A
Vostro account is an account held by a
Bombay HC: Prime facie "In terms of incremental deposits as
bank that allows the customers to de-
well, while deposits by SCB's have in-
removal of Kochhar as posit money on behalf of another bank.
creased by Rs. 55.4 lakh crores over the
ICICI Bank CEO valid last 5 years, small saving deposits have The Reserve Bank of India had an-
only increased by Rs. 4.6 lakh crore," nounced guidelines on overseas trade
The Bombay High Court (HC) ruled that
the report, authored by economist
Chanda Kochhar's termination from in Indian Rupee in July. In part, this is
Aditi Gupta, showed.
the post of managing director and also aimed at curtailing India's dollar
chief executive officer of ICICI Bank However, the silver lining is that the dependence for trade, and indirectly
was prima facie valid. It also found in- ratio of small savings term deposits to strengthen the domestic currency.
BANKING FINANCE | DECEMBER | 2022 | 5