Money & Banking

'Federal Bank has not sought any change in foreign investment limit'

V. Sajeev Kumar Kochi | Updated on March 12, 2018 Published on October 28, 2013

Shyam Srinivasan, Managing Director and CEO, Federal Bank, has clarified that the bank has not sought any change in the already existing limit of foreign investment (or even in the existing sub-limits for FIIs up to 49 per cent and NRI holding up to 24 per cent) in the equity share capital of the bank (file photo).

Amidst reports doing the rounds regarding its foreign holding, the Kerala-based Federal Bank has come out with a clarification on its foreign investment.

“We would like to clarify that we have not sought any change in the already existing limit of foreign investment (or even in the existing sub-limits for FIIs up to 49 per cent and NRI holding up to 24 per cent) in the equity share capital of the bank,” Shyam Srinivasan, Managing Director and CEO, said at a press meet here on Monday.

This limit is exactly as was approved by the shareholders’ resolution of February 23, 2006, and RBI approval dated March 22, 2006, he said.

The consolidated FDI policy issued by the Department of Industrial Policy and Promotion on April 5, 2013, stipulates that specific Government approval should be obtained for foreign holding above 49 per cent and up to 74 per cent of the equity capital of private sector banks.

In the light of this policy announcement, he said RBI had mandated Federal Bank to seek approval from the FIPB for continuing with their already prevailing foreign holding limit, he said, adding FIPB approval was therefore required to maintain the status quo of the limits extant in the bank since 2006.

He said the cap limit on individual shareholding of 4.99 per cent would remain and no shareholder whether domestic, FII, NRI would be able to acquire stake in the bank beyond 4.99 per cent without obtaining the approval of the board of directors and thereafter of the regulators.

“While the reports confirm that FIPB has approved the bank’s application, we are yet to receive the formal communication of the approval,” he said.

“Our focus area remains organic growth and we are not in any way considering any change in the ownership structure of the bank,” he added.

Published on October 28, 2013
null
This article is closed for comments.
Please Email the Editor