Federal Bank seek FIPB nod to up foreign holding

In the wake of the Indian government's liberalisation drive for foreign investment in crucial sectors, private-sector lender Federal Bank Ltd plans to file an application with the Foreign Investment Promotion Board (FIPB) for increasing its foreign shareholding limit.

Federal Bank Ltd is preparing to file an application with FIPB to increase its foreign shareholding limit to 74 per cent, according to a report. Federal Bank, like another private lender Axis Bank, has crossed the current foreign shareholding limit of 49 per cent.

The RBI on Tuesday notified that shareholding by foreign institutional investors (FIIs), non-resident Indians (NRIs), persons of Indian origin (PIOs), foreign direct investment (FDI), American depository receipts (ADRs), and global depository receipt (GDRs) in Federal Bank had crossed the 49 per cent limit. ''Therefore, no further purchases of shares of this bank (Federal Bank) would be allowed through stock exchanges in India on behalf of FII/NRI/PIOs,'' the central bank said.

''We have shareholder approval to increase the foreign shareholding limit up to 74 per cent. We will be seeking a FIPB approval to increase the foreign shareholding limit from 49 per cent to 74 per cent,'' D Sampath, chief financial officer of Federal Bank, said.