The board of IDFC Limited accorded an in-principal approval to infuse ₹2,200 crore into IDFC First Bank, providing growth capital to the lender.

The capital infusion will take IDFC’s shareholding in the bank to up to 40 per cent from the existing 36.38 per cent, the company said in a release.

This comes as the parent company is planning for a reverse merger with IDFC First Bank. The boards of IDFC, IDFC Financial Holding Company and IDFC First Bank had accorded an in-principal approval to merge IDFC anf IDFC Financial Holding with IDFC First Bank in December 2021.

Capital adequacy ratio of the bank was at 16.06 per cent at the end of December, of which tier-I capital was 13.49 per cent. Average liquidity coverage ratio (LCR) for the reporting quarter was at 122 per cent.