FIPB likely to reject HDFC Bank's proposal to increase FDI
Quotes

FIPB likely to reject HDFC Bank's proposal to increase FDI

Last Updated: Tuesday, April 29, 2014, 22:02
 
 Comment 0
 
FIPB likely to reject HDFC Bank's proposal to increase FDI
New Delhi: The FIPB is likely to reject HDFC Bank proposal to allow further foreign holding as it would cross the 74 percent sectoral ceiling, officials sources said.

"There is no further space to increase foreign investment in the bank. So, FIPB is unlikely to approve the proposal," they said.

Officials of the Department of Economic Affairs and the DIPP were scheduled to meet today to discuss the HDFC proposal. However, the proposed meeting was cancelled.

"The Department of Economic Affairs had convened a meeting on the matter. It was cancelled," they said.

The meeting was scheduled to decide whether the 22.64 percent stake in HDFC Bank of parent HDFC Ltd is foreign investment or not.

HDFC Bank had approached the Foreign Investment Promotion Board (FIPB) in the latter half of 2013 to increase the foreign holding in the bank to 67.55 percent from 49 percent.

According to sources, if the proposal of the bank to raise foreign investment to 67.55 percent is accepted, it would exceed the cap of 74 percent, after taking into account parent HDFC Ltd's stake.

As per the existing guidelines, the foreign holding in the bank cannot exceed 74 percent.

HDFC Ltd, which is 75.71 percent owned by FIIs, and associate companies, hold 22.64 percent in HDFC Bank. Their investments in HDFC Bank were made before 2009, when the government came out with norms to calculate the level of foreign investment in companies.

"Downstream investment by HDFC Ltd prior to 2009 in HDFC Bank would be deemed as FDI in case there is any change in the shareholding pattern after the cut-off year," they said.

Last week, FIPB did not take up HDFC Bank's proposal.

HDFC Bank had approached the Foreign Investment Promotion Board (FIPB) in the latter half of 2013 to increase the foreign holding in the bank to 67.55 percent from 49 percent.


PTI

First Published: Tuesday, April 29, 2014, 22:02


Comments


comments powered by Disqus
G20 Summit 2014
G20 Summit 2014
2014`s Top People in Business: Fortune
2014`s Top People in Business: Fortune
World Bank`s Top 10 Places for Business
World Bank`s Top 10 Places for Business
India`s top ten billionaires
India`s top ten billionaires
Top 10 billionaire cities- In Pics
Top 10 billionaire cities- In Pics

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved