Axis Bank is reviewing and evaluating implications of the central bank's draft circular on business and prudential regulation for investments and will do what is in the best interest of the shareholders, said Puneet Sharma, chief financial officer of Axis Bank in the lender's Q2FY25 conference call.

We do intend to review and make representations to clarify our understanding of the draft circular at its time today and we will wait for the final guidelines to determine our position," said Sharma.

The draft proposal from the Reserve Bank of India released on October 4 said that only a single entity within a bank group can undertake a particular form of permissible business. It further said that multiple entities within a bank group shall not undertake the same business or hold or acquire the same category of license from any financial sector regulator.

One of the draft changes says that accepting deposits and lending money shall necessarily be carried out departmentally. However, other businesses like mutual funds, insurance, pension fund management, investment advisory services, portfolio management services, and broking services cannot be carried out departmentally but only through a group entity.

As per a recent Jeffries report, these norms could affect banks like Axis Bank, HDFC Bank, Kotak Mahindra Bank, and Federal Bank, which may have overlapping business in subsidiaries.

Axis Bank reported a 18 percent rise year-on-year (YoY) in its net profit at Rs 6917 crore in Q2FY25 due to higher core lending income on the back of strong credit demand. The net interest income of the lender was reported at Rs 13,533 crore, higher than nearly 10 percent from Rs 12,315 crore last year.

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Published On - October 17, 2024 / 19:55 IST