"The additional capital will go a long way in supporting our growth plans over the next few years, especially in semi-urban and rural India," its deputy managing director Paresh Sukthankar said in a video message.
He also welcomed the Union Cabinet's nod and added that the decision bodes will for the overall investment climate as well as foreign inflows into the country.
In a statement, the bank said it had to get the go ahead from the Cabinet Committee on Economic Affairs (CCEA) as this was an FDI (foreign direct investment) proposal in excess of Rs 5,000 crore not under the automatic route.
The bank has been given the nod provided the overall foreign ownership does not breach the 74 per cent mark.
The Rs 24,000-crore capital infusion plan includes raising Rs 8,500 crore from parent HDFC such that the mortgage major's holding in the bank is retained at 25.60 per cent, while the rest is likely through a qualified institutional placement (QIP) of shares.
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