Central Bank Of India is planning to sell its entire 64.40% stake of a housing finance subsidiary

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24 Feb 2020 : Central Bank Of India is planning to sell its entire 64.40% stake of housing finance subsidiary, that is Cent Bank Home Finance (CBHFL), a top bank official said. In order to appoint merchant bankers, the lender floated a request for proposal (RPF).Those who get shortlisted are going to help the lender scout for a potential investor to buy its share in the mortgage financier.

“We plan to exit from Cent Bank Home Finance. The bank already provides housing loans, and so, we feel that there is no need to have a housing finance subsidiary,” Central Bank of India managing director and chief executive officer, Pallav Mohapatra, told .

The bank holds 64.40 per cent in the unlisted housing finance company, while the remaining stake is held by Housing & Urban Development Corporation (HUDCO), Unit Trust of India (UTI) and National Housing Bank (NHB).

The bank is facing operational curbs under the Reserve Bank’s (RBI) prompt corrective action (PCA) framework.
Mohapatra said the process of determining the valuation of the Bhopal-headquartered home finance company will begin as soon as the merchant bankers are appointed.

“Right now, it is difficult to say how much we will be able to realise through this disinvestment. Once the valuation is done, we will be in a better position to assess the amount we can raise. But, we expect a better valuation for CBHFL than its peers as it is a deposit-taking NBFC,” he said.

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