As if demonstrating a strong religious affiliation, the Catholic Church in Kerala has used its good offices to raise Rs 250 crore to buy a
substantial stake in Catholic Syrian Bank (CSB), which is on the radar of rival Federal Bank.

The development comes after the Catholic community, primarily the Syrian Catholics, recently goaded Thrissur Acrchbishop Andrews Thazhath to form an action committee under the banner of CSB Protection Committee and made him its chairman.

The Church has already garnered Rs 250 crore from NRI investors from the state to buy a substantial stake in the bank. The move is aimed at “protecting”the interests of Christian community. “The CSB Protection Committee has already garnered significant support from the community and has collected Rs 250 crore so far,” committee general convener Johny Chandy said.

Move assumes importance in the wake of RBI stipulation to the Thailand-based NRI businessman Surachan Chawla to bring down his stake to 10% from 24% by this March. And the Church is primarily eyeing this 14% that Mr Chawla has to offload. Mr Chawla is the single-largest shareholder in the troubled Thrissur-based bank currently.

The CSB Protection Committee has received commitments for another Rs 100 crore from a clutch of investors as well, which will enable it to acquire around 30% stake from existing investors in CSB, Mr Chandy said.

“We have mobilised Rs 250 crore from various investors and have commitments from four other parties to put in Rs 25 crore each. This should enable us to buy around 30% stake in the bank,” CSB Protection panel convener Mr Chandy said.

The CSB Protection Committee is holding talks with various parties to raise necessary funds, Mr Chandy said, adding it has kept RBI informed about its plans. “We are confident that we will succeed in our efforts in the next few months,” Mr Chandy informed.w

The Church is trying to gain control of around 14% stake of Mr Chawla and another 15% from three Mauritius-based private equity funds — AIF Capital, Garfmore Private Equity and Siguler Guff — together hold about 15%.

Last year, Kochi-based Federal Bank had expressed its interest to take over the unlisted CSB, but the move is yet to fructify following differences over valuations. Other major stakeholders of CSB are engineering major L&T and Edelweiss and together they have 5%, Federal Bank also holds 5% stake, while a group of local investors together hold around 15%.

Given this, if the Church manages to buy the stakes of Mr Chawla and the Mauritius-based PEs, it would enable the community to ensure an indirect control on the management of the bank. The Church already enjoys a significant control over the bank through various investors, who would stand for community’s interest.

After Federal Bank announced its plan to take over CSB, the Syrian Catholic Church in general and the Thrissur Archdiocese in particular, were riled at the move and were very vocal in opposing it.