Reserve Bank today said foreign investors will have to seek its permission before purchasing further equity in Equitas Holdings as the prescribed limit has reached trigger level.
RBI said it has put Equitas Holdings under caution list under monitoring of foreign investment under portfolio investment scheme (PIS).
The aggregate foreign shareholding through ADR/GDR/FIIs/ RFPIs/FDI/NRI/Persons of Indian Origin in Equitas Holding Ltd has reached the trigger limit, RBI said in a notification.
"Hence further purchases of equity shares of this company would be allowed only after obtaining prior approval of the Reserve Bank of India," it said.
Chennai-based Equitas Holdings is one of the 10 entities that have received in-principle approval from RBI in September to set up a small finance bank. Earlier last week, Equitas said it will commence SFB operations soon.
Foreign shareholding in small finance banks would be as per the foreign direct investment policy for private sector banks, according to the RBI guidelines for the sector.
As per the norms stipulated by RBI, the total foreign investment from all sources shall not exceed 49 per cent.
Equitas Holdings stock closed 0.63 per cent down at Rs 187.80 on BSE.
