Of the nine private sector banks which were issued licences between February1994 and November 1995, only HDFC Bank and Global Trust Bank have broughtdown the promoters' stake to less than 40 per cent. Other banks in the grouphave entered the capital market with equity offerings but the promoters ofthese banks still hold over 40 per cent. IDBI Bank, UTI Bank, Centurion Bankand TimesBank -- which is slated to get merged with HDFC Bank with effect fromDecember 1 -- made their initial public offerings this year. Going by thelicensing norms, these banks are required to tap the capital market anddilute the promoters' stake to below 40 per cent after the first year ofoperations.

However, the RBI allowed banks to defer their public issues on acase-by-case basis considering the poor capital market conditions prevailingtill the middle of the current financial year. Since time is running out forthese banks for making a second round of equity offerings, some of them areplanning to privately place equity with overseas partners to bring down thepromoters' stake to some extent. "The indication from RBI is that if we areable to place a part of the equity with a strategic partner, we will begiven more time to dilute the promoter's stake to 40 per cent," said onebanking source.

Among the nine new private banks, the promoters' stake in HDFC Bank is thelowest at 30.77 per cent (which has undergone change following the merger ofTimesBank with HDFC Bank), followed by Global Trust Bank at 38.43 per cent.