Federal Bank shares up 6.5% on RBI move

The government approved increasing foreign investment in Federal Bank from 49% to 74% for its paid up equity share capital.

Shares of Federal Bank on Saturday surged 6.5 per cent after the Reserve Bank of India (RBI) said foreign investors will be allowed to purchase stake in the private bank.

Federal Bank’s share shot-up 6.05 per cent to settle at Rs 91.15 on the Bombay Stock Exchange (BSE) in a special trading session.

At the National Stock Exchange, the stock rose 6.52 per cent to close the day at Rs 91.55.

With the increase in foreign investment limit in Federal Bank to 74 per cent, foreign investors will be allowed to purchase stake in the private bank, RBI had said on Friday.

The bank has been removed from the ban list and the restrictions placed on the purchase of shares have been withdrawn with immediate effect, the apex bank said. “Equity shares of the bank, can now be purchased through primary market and stock exchanges,” RBI said in a notification on Friday.

The restrictions were removed as government approved increasing foreign investment in Federal Bank from 49 per cent to 74 per cent for its paid up equity share capital.