The Reserve Bank Monday allowed Indusind Bank to increase its FII investment limit to 49 percent but asked it to ensure that the aggregate foreign investment in the bank does not exceed 74 percent.
New Delhi: The Reserve Bank Monday allowed Indusind Bank to increase its FII investment limit to 49 percent but asked it to ensure that the aggregate foreign investment in the bank does not exceed 74 percent.
"The Reserve Bank...Advise that its approval to the Induslnd Bank for raising FII investment limit to 49 percent is subject to the condition that aggregate foreign investment in the bank should also not exceed the composite sectoral cap of 74 percent," the apex bank said in a statement.
As on September-end, Foreign Institutional Investors' (FIIs) had 34.26 percent stake in the bank.
In its Annual General Meeting, Indusind Bank's promoters had passed resolutions to allow FIIs to buy up to 49 percent of its paid-up equity capital through primary/secondary markets in India.
"As Induslnd Bank has now passed necessary resolutions in this regard, equity shares of Induslnd Bank can now be purchased through primary market and stock exchanges...," RBI said.
However, the purchase of equity shares by a single FII/ SEBI approved sub-account of a registered FII in the Induslnd Bank should not exceed 10 percent.
The Reserve Bank said it would henceforth be monitoring the FII investment under Portfolio Investment Scheme (PIS) at sectoral cap/statutory ceiling as applicable and not the intermediate ceiling fixed by the bank.
"It will be the bank's responsibility to ensure that the applicable cap is not breached. The permission is being issued from FEMA angle only," it added.
As per the current norms, RBI needs to be intimated in case of transfer of five percent or more shares of a private sector bank by FIIs.