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Foreign Institutional Investors (FIIs) have been allowed to raise their stake in private sector lender Karur Vysya Bank to up to 40 per cent.
“...the Karur Vysya Bank Ltd has passed a resolution at its Board of Directors’ Meeting and a resolution agreeing for the purchase of its equity shares by FIIs up to 40 per cent of their paid—up capital through primary/secondary markets in India,” Reserve Bank said in a release today.
The approval to the Karur Vysya Bank for raising FII investment limit to 40 per cent is subject to the condition that aggregate foreign investment in the bank should also not exceed the composite sectoral cap of 49 per cent (49 per cent under automatic route and beyond 49 per cent to 74 per cent under government Route), RBI said.
Under the existing conditions, RBI should be informed about acquisition or transfer of shares of 5 per cent and more of a private sector bank by FIIs.
FIIs, NRIs and PIOs are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS).
Under the scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges.
As per data on the BSE, the stake of FIIs in the bank stands at 24.89 per cent as of September 2013.
Karur Vysya share closed 1.88 per cent lower at Rs 344.90 per share on the BSE today.
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