Indonesian International Holdings Ltd (IIHL), the promoter of Indonesian Bank, is ready to increase its bank’s shares to up to 26% once approved by the Reserve Bank of India (RBI). BusinessLine. He talks about the succession of the CEO at the bank, appoints IIHL candidates to the bank’s board of directors, and appoints the promoter’s intention to inject more capital into the bank, subject to regulatory approval.
When are you hoping that RBI’s nod will increase its Indusind Bank shares to 26%?
There is a process. Private sector bank promoters can raise shares of up to 26%. Next is Form A. This requires banks to be filled and routed. After that, there may be a query, but I will respond to it. Once these are met, their privileges are theirs about when to grant approval. After receiving the nod, they are ready to raise capital from shareholders.
You can also go to the secondary market. Or, if the bank needs capital, approach the capital market. At this time, there are no immediate requirements for funds in the bank. Even after a potential hit of 1,500 or 2,000 crores, the validity of its capital is over 15%, and 12% if the minimum requirement exceeds.
Will the promoter suggest Indusind Bank at Nudge and the name of the external CEO candidate to RBI?
You can also consider it if there is someone in the system. However, we must follow the recommendations of the Board and the Nomination and Compensation Committee (NRC). Two or three (of candidates) must go, and based on board recommendations, the RBI will make a final call following a candidate’s own evaluation.
Have you considered appointing IIHL candidates to the bank’s board of directors?
We have signed a contract with the bank as promoters. You should seek a 2-3 board director. Once it is cleared and approved by the RBI, we will appoint it. Currently, when a bank has a contract in place, two or three representatives will be on the board.
Since the recent adverse events, significant investor value has been lost. As a promoter, what is your message to shareholders?
Investors should not panic. They shouldn’t worry. Yes, they need to worry about reliability and their money lying in the institution. Is there any problem? no. Because the failed bank had no promoter behind it. This bank has a strong promoter. If problems arise, the promoter is strongly behind the institution. Therefore, shareholders and customers should not be worried. Additionally, the RBI gave a press conference in support of what I was saying.
Are you satisfied with Indusind Bank’s corporate governance?
How can I say I’m comfortable every time I have that kind of problem. I’m not comfortable. No one is comfortable because that’s what’s happening over the last 5-7 years. Only after receiving the report can we know if it is governance, technical, or intentional. Because audits have been conducted for years.
What is your global expansion plan?
We are open to exploring global opportunities. As I said, IIHL shareholders have high net worth, are funded and are always looking for opportunities. If the board recommends such an opportunity, we will definitely see it. The viability needs to be there. There are many opportunities from Europe, Sri Lanka and Indonesia. However, unless the investment banking team is comfortable, we won’t move forward.
Released on March 18, 2025
