Canara Bank, a public sector lender in India, has received approval from the Reserve Bank of India (RBI) to divest a 70% stake in its unlisted subsidiary, Canbank Factors Ltd. This move is part of Canara Bank’s broader strategy to reorganize its subsidiaries and streamline its operations.
Canara Bank currently holds a 69.14% share in another unit, Canbank Computer Services, and is proposing to buy out shares of other shareholders in this unit, such as Bank of Baroda and DBS Bank India. Additionally, Canara Bank is considering transferring its credit card and other digital product portfolios to CCSL (Canbank Computer Services Ltd).
As for Canbank Factors, Canara Bank is seeking bids for its entire 70% stake in this joint venture. The bank has set a base price of Rs 90 crore (approximately USD 11.3 million) for this stake. Apart from Canara Bank, Andhra Bank holds a 10% stake in Canbank Factors.
This divestment is a significant step for Canara Bank, reflecting its efforts to optimize its subsidiary portfolio and focus on its core banking operations. The sale of the stake in Canbank Factors will likely attract interest from various investors, given the company’s role in the non-banking financial sector and its established position in the market.