Foreign institutional investors (FIIs) can now purchase up to 37 per cent of paid-up capital in Kotak Mahindra Bank through the primary/secondary markets, the Reserve Bank of India has notified.
The RBI’s approval to the bank for raising the FII investment limit is subject to the condition that aggregate foreign investment in the bank will not exceed the composite sectoral cap of 74 per cent (49 per cent under automatic route and beyond 49 per cent to 74 per cent under government route), the RBI said.
Under the current FDI policy of the Government, foreign shareholding in private sector banks is allowed up to a ceiling of 74 per cent of the paid-up equity capital.
Resolution passed
The central bank notified that Kotak Mahindra Bank has passed resolutions at its board of directors’ meeting and a resolution in its annual general meeting agreeing on the same.
“The purchase of equity shares by a single FII/SEBI approved sub-account of a registered FII in Kotak Mahindra Bank shall not exceed 10 per cent of the paid-up equity capital of the bank,” the notification said.
Last month, Axis Bank and Federal Bank had applied to the Foreign Investment Promotion Board to hike their FII limit from 49 per cent to 62 per cent and 65 per cent, respectively.
beena.parmar@thehindu.co.in