'Corporate raid on ICICI Bank just not possible'
Montek Singh Ahluwalia said it is not possible for just anyone to take over the management due to strong regulations in India.business Updated: Oct 14, 2008 13:23 IST
Ruling out the possibility of a corporate raid on ICICI Bank through hammering down of its share price, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday said it is not possible for just anyone to take over the management due to strong regulations in India.
"There are limits (shares) on what can be bought by an individual. Ability to change management is also dependent on lots of regulatory approvals, so I don't think people should have any fear that all of a sudden ICICI Bank may change management because of stock manipulation," he told PTI in an interview.
On whether nationalised banks are more capable of handling market pressures due to backing of the government, he said, "It is true that in public sector banks nobody can change the management because we are not going to reduce the government ownership below 51 per cent...So the trading in stocks only remains up to 49 per cent."
He added, "In a private sector bank there is no freeze on majority ownership so stocks would be traded more freely. Whether that leads to instability or not depends on market conditions. I don't see that very crucial for the actual stability of the banking system."
Both private and public sector banks are subjected to same regulation and supervision, he said, adding, "when I am saying that the banking system is strong as judged by the Finance Ministry and the RBI, that applies to both. As far as the stability of the banks are concerned, the private sector banks that we are supervising are as sound".
ICICI Bank management had earlier alleged that "vested interests" were indulging in malicious rumours to pull down the bank but ruled out that any banking rival was behind it.