The Hindu Business Line : Federal Bank to hike FII investment to 49 pc

Money & Banking - Private Banks
Markets - Foreign Institutional Investors

Federal Bank to hike FII investment to 49 pc — Postal ballots sent to shareholders

Our Bureau

Kochi , Feb. 8

FEDERAL Bank is seeking shareholders' approval for increasing FII investment in the bank to 49 per cent.

"We have already attained the 24 per cent limit in FII investment and would like to move ahead. Greater exposure by FIIs in the bank would be an investor-friendly exercise as it is expected to provide greater liquidity and visibility to the bank's equity in the international and Indian markets," Mr M. Venugopalan, Chairman of the bank, said.

Through postal ballots sent to its shareholders, the bank is seeking approval to increase aggregate foreign investments up to 74 per cent of the bank's total paid-up capital. Of this, 24 per cent would be from NRI investments and the remaining 49 per cent would be from FIIs, the communication to the shareholders has said. Currently, the NRI holding in the bank is quite minimal.

The bank is also seeking shareholders' consent to increase the number of members on the board from nine to 12. "We want more professionals on the board, especially to guide the bank in the spheres of strategy, technology and retail credit segment," Mr Venugopalan said. For bringing more professionals into the top hierarchy, the bank also proposed to appoint one or more whole time executives, who may be designated as Executive Directors, without being members of the board. The bank currently has two Executive Directors. The last date for submission of the postal ballot is February 23, and the decision of the shareholders on these two issues would be known after that.