Muthoot promoters may sell stake once RBI clears bank licence

Written by PTI | Hyderabad | Updated: Feb 18 2014, 21:44pm hrs
The Moothot Finance Muthoot promoters may sell stake once RBI clears bank licence ( Reuters)
Promoters of Muthoot Finance may dilute their stake once their application for bank licence is cleared by the Reserve Bank of India, a senior executive of the gold loan company said today.

George M Alexander, senior vice president of Muthoot also said they expect some decision on the licence issue by the end of February from the RBI and accordingly the company will approach SEBI for necessary approvals.

"We have time till May 2014 (on promoters' stake dilution). Maybe in the next two to three months, we will be deciding what needs to be done. We would like to hear what RBI says for our banking licences.

"Only then we would like to do the stake sale. If we get banking licence, then we need to bring in more share capital," Alexander told reporters here.

"We will request the SEBI that RBI is yet to come out with the licences issue. We might ask SEBI to give more time in case there is a delay from RBI on licence issue," he added.

Currently, promoters of Muthoot Finance hold 80.12 per cent stake in the company.

Replying to a query, he said the company is in advantageous position with regard to setting up of white label ATMs.

According to him, for banks it works out to nearly Rs 1 lakh per month, including real estate cost, security and cash loading for maintaining an ATM.

"We want to keep ATMs in our own branches. We are going to do the cash loading ourselves. We are not going to have any external agency to do that...," he explained.

Muthoot Finance has a branch network of 4,200 spread across 21 states and four union territories. Around 60 per cent of this branch network is spread across Tier-II, Tier-III and Tier-IV cities.

Muthoot Finance has also recently received in-principle approval from RBI to set up White Label ATMs. The company has chalked out plans to set up 9,000 ATMs in the next three years.