City Union Bank hits 52-week high on RBI nod for hiking FII stake limit

The RBI has allowed FIIs to purchase up to 35% of the paid-up capital of the bank

City Union Bank is trading higher by 4% to Rs 60.15 on BSE after the Reserve Bank of India (RBI) allowed foreign institutional investors to purchase up to 35% of the paid-up capital of the bank.

RBI said that it has removed City Union Bank from its banned list, allowing it to raise the FII investment limit up to 35% cent of its paid up capital as the foreign shareholding limit had gone below threshold level.

"It is also advised that for FII or Registered Foreign Portfolio Investor (RFPI) or Qualified Foreign Investors (QFI) and NRI under PIS, individual ceiling shall be 5% respectively and aggregate limit for all RFPI/FII/QFI shall be 35%,” RBI said in a notification.

"... City Union Bank will have to monitor individual limits of FII/FPI/QFI & NRI and also ensure that at no time its total foreign investment (direct as well as indirect) exceeds 49%, beyond which, it should seek prior FIPB approval," RBI added.

As on March 31, 2014, FIIs held 21.54% stake in City Union Bank, the shareholding pattern data shows.

The stock opened at Rs 59.10 and touched a 52-week high of Rs 60.20 on the BSE. A combined 905,000 shares changed hands on the counter till 1055 hours on the BSE and NSE.