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

24 Feb 2020: Central Bank of India decides to sell Cent Bank Home Finance (CBHFL), a top bank official, the entire 64.40 percent stake in the housing finance subsidiary. A request for a proposal (RPF) was floated by the lender in order to nominate merchant bankers. Those who get shortlisted would help the lender scout for a potential investor to buy their share of the mortgage financier.

We intend to leave Cent Bank Home Finance. Housing loans are already issued by the bank, and so we feel there is no need for a subsidiary of housing finance, “said Pallav Mohapatra, managing director and chief executive officer of the Central Bank of India.”

The bank owns 64.40% of the unlisted housing finance company, while the Housing & Urban Development Corporation (HUDCO), Unit Trust of India (UTI) and National Housing Bank (NHB) hold the remaining stakes.

Under the Reserve Bank’s (RBI) prompt corrective action (PCA) system, the bank faces operational curbs.
Mohapatra said that as soon as the merchant bankers are selected, the process of evaluating the valuation of the Bhopal-headquartered home finance firm will begin.

“It is difficult to tell how much we will be able to realize from this disinvestment right now. Once the valuation is completed, we will be in a better position to determine the sum we will earn. But, since it is a deposit-taking NBFC, we expect a better valuation for CBHFL than its peers,” he said.

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