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Amidst uncertainties over the HDFC Bank FDI proposal, the private sector bank’s Managing Director Aditya Puri said on Wednesday that the Government is yet to decide on the issue.
“No decision has been taken yet on the HDFC Bank FDI proposal,” Puri said after meeting Finance Secretary Arvind Mayaram here.
HDFC Bank’s proposal for increasing foreign holding in the bank to 67.55 per cent from 49 per cent was first listed on the agenda of the FIPB in November 2013.
However, the proposal could not be taken up because the Department of Industrial Policy and Promotion (DIPP), the nodal agency for framing FDI policy, has been arguing that any increase in foreign shareholding would result in breach of the FDI guidelines.
FIPB, headed by the Economic Affairs Secretary, is the nodal body for approving FDI. Other authorities involved in vetting the HDFC bank proposal include the RBI, DIPP, DEA and the Law Ministry.
The Law Ministry has suggested that the DEA and the DIPP, a wing of the Industry Ministry, take a view on the proposal of the country’s second largest private bank.
According to sources, if the bank’s proposal to raise foreign investment to 67.55 per cent is accepted, it would exceed the cap of 74 per cent, after taking into account parent HDFC Ltd’s stake.
HDFC holds 22.64 per cent stake in HDFC Bank and the DEA and DIPP are deliberating whether that investment is foreign investment or not. FIIs hold 75.7 per cent in HDFC.
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