SEBI not happy with RBI's intervention in HDFC Bank trading case


According to a report in the Economic Times, the market regulator has penned a letter to the Reserve Bank stating that the latter’s intervention without consulting with SEBI was not correct. 


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The Securities and Exchange Board of India (SEBI) is reportedly not happy with the central bank’s intervention in the HDFC Bank 's February 17 trading case where foreign funds ended up trading in the stock even after the limit was breached. According to a report in the Economic Times, the market regulator has penned a letter to the Reserve Bank stating that the latter’s intervention without consulting with SEBI was not correct. An official with direct knowledge of the letter said that SEBI has also requested for a solution to avoid such instances in the future. Following the letter, officials of both the regulatory bodies met to discuss the issue last week. On February 16, the foreign holding of HDFC Bank went below 72 percent on back of conversions of employee stock ownership plan (ESOPS) in the bank. The RBI then initiated fresh buying for foreign portfolio investors (FPIs). Frenzied buying on February 17 led to breach in purchase limit at 1:39 PM, post which trading was restricted in HDFC Bank shares. The Reserve Bank then said trades done after 1:39 PM would not be settled. While the central bank has said trades won’t be settled, it is unclear whether they will be reversed or liability will fall on brokers who bought on behalf of FIIs.





author : Profit Street

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