Moneycontrol Be a Pro
Get App
Last Updated : Feb 21, 2017 12:07 PM IST | Source: CNBC-TV18

FII limit in HDFC Bank: RBI asking custodians to not honour trades is unfair, says pros

Market regulator, Securities and Exchange Board of India (SEBI) met with RBI today to discuss the issue of foreign institutional holding in HDFC Bank overshooting on last Friday, according to sources.


Market regulator, Securities and Exchange Board of India (SEBI) met with RBI today to discuss the issue of foreign institutional holding in HDFC Bank overshooting on last Friday, according to sources.

Last week, shares of HDFC Bank were put for sale as the foreign shareholding had dropped below the required level of 74 percent. However, by 1:39 PM, the shareholding crossed 74 percent and the Reserve Bank flashed a notification of breach of limit.

Trades post 1:39 PM will not be settled at the instruction of RBI, sources have told Moneycontrol. It is also unclear whether these trades will be reversed or liability will fall on the brokers representing the foreign institutional investors (FIIs).

Asking custodians to not honor the trade is a wrong decision by RBI, believes market experts Deena Mehta and Dipan Mehta, a member of BSE and NSE.

The excess shares can be put in an Escrow, said Deena Mehta adding that the situation is unlikely to devolve into a crisis.

However, Dipan Mehta said a 24-48 hours limit to liquidate shares in an Escrow account is not fair to traders.

Watch video for the full discussion...

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Feb 20, 2017 09:01 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant