Following the central bank's decision, overseas investors can now invest up to 74 per cent in the lender's equity shares.The apex bank removed the private sector bank from the ban list and lifted the curbs placed on the purchase of shares of Federal Bank, effective immediately.
"Equity shares of Federal Bank Ltd can now be purchased through primary market and stock exchanges", the apex bank said in a statement, according to the PTI report.
The Indian government raised the foreign investment limit in the paid up equity share capital of Federal Bank to 74 per cent from 49 per cent, following which the RBI removed the restrictions.
"... the aggregate shareholding through Foreign Institutional Investors (FIIs)/Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/Foreign Direct Investment (FDI)...in Federal Bank has gone below the prescribed threshold ban limit stipulated under the extant FDI policy," RBI added.
FIIs, NRIs and PIOs (Persons of Indian Origins) are allowed to invest in primary and secondary capital markets in India through the Portfolio Investment Scheme (PIS).
However, the limit on FII/NRI/PIO investments in Indian companies is monitored by the RBI on a daily basis.
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