Federal Bank gets CCEA nod to raise foreign shareholding to74%

The government today approved a proposal of Federal Bank for raising foreign shareholding limit in the bank to 74 per cent from existing 49 per cent.
The Cabinet Committee on Economic Affairs has approved the proposal of Federal Bank for increase in foreign investment to 74 per cent subject to the aggregate foreign institutional investors (FIIs) shareholding not exceeding 49 per cent of the paid up equity share capital of the bank, an official release said.
The approval would result in foreign investment of approximately Rs 1,400 crore in the country, it said.
Federal Bank had approached the Foreign Investment Promotion Board (FIPB), as Reserve Bank in August, 2013, prohibited foreign institutional investors, non-resident Indians and persons of Indian origin from purchasing shares in Federal Bank as its foreign holding had crossed 49 per cent.

Subsequently, FIPB in October last year cleared the proposal to raise the foreign investment holding.
As on September 2013, holding of FIIs in the bank was 44.11 per cent, of DII (domestic institutional investors) 20.60 per cent and of others 35.29 per cent.
Shares of the bank today closed at Rs 82.65, up 4.03 per cent on BSE over its previous close.