Federal Bank today clarified that no formal approval has been received from FIPB on foreign investment in the Bank as reported yesterday. It also said that the foreign investment is supported by required shareholders and regulatory approvals.
Consequent to the recent changes in the consolidated FDI policy issued by DIPP (Department of Industrial Policy and Promotion), which specifies government approval route above 49% and up to 74% for private sector banks, RBI mandated the bank to seek approval form FIPB for the foreign holding already approved.
While media reports suggest that FIPB has approved Bank’s application, no formal communication/ approval has been received from FIPB by us, so far, a statement said.
The cap/ limit on individual shareholding of 5% would remain and no shareholder would be able to acquire stake in the Bank beyond 5% without the approval of RBI. The approval by FIPB would only restore the earlier position that had been prevailing in the Bank since 2006, it added.
