The Reserve Bank has put Ujjivan Financial Services on its ban list for foreign investment, which means overseas investors will not be able to buy further equity in the company.
The aggregate foreign shareholding through foreign institutional investors, registered foreign portfolio investors, foreign direct investment, non-resident Indians, American Depository Receipts, Global Depository Receipts and persons of Indian origin in Ujjivan Financial Services has crossed the permissible limit, RBI said.
"Hence... No further purchase of shares of this company would be allowed through stock exchanges in India on behalf of FII, RFPI, FDI, NRI, ADR, GDR and PIO," RBI said in a release.
The Bengaluru-based Ujjivan Financial Services is one of the recipients of the small bank licence granted by RBI last year. It would be the holding company for the proposed Ujjivan Small Bank.
Small finance banks will be allowed to carry basic banking activities like accepting deposits and lending to the unserved and under-served, including small businesses, small and marginal farmers, micro and small industries and unorganised sector entities.
As per RBI norms, promoters' minimum initial contribution to the paid-up equity capital in a small bank will be at least 40 per cent that will be gradually brought down to 26 per cent within 12 years from the date of commencement of business of the bank.
However, the shareholding of the promoter group and foreign investors in the company could not be ascertained.
The stock closed 3.56 per cent higher at Rs 391.10 on BSE.
