FIIs allowed to raise stake in Karur Vysya Bank to 40 per cent
Jan 02 2014 , Mumbai
"...The Karur Vysya Bank Ltd has passed a resolution at its Board of Directors' Meeting and a resolution agreeing for the purchase of its equity shares by FIIs up to 40 per cent of their paid-up capital through primary/secondary markets in India," Reserve Bank said in a release today.
The approval to the Karur Vysya Bank for raising FII investment limit to 40 per cent is subject to the condition that aggregate foreign investment in the bank should also not exceed the composite sectoral cap of 49 per cent (49 per cent under automatic route and beyond 49 per cent to 74 per cent under government Route), RBI said.
Under the existing conditions, RBI should be informed about acquisition or transfer of shares of 5 per cent and more of a private sector bank by FIIs.
FIIs, NRIs and PIOs are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS).
Under the scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges.
RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis.
For effective monitoring of foreign investment ceiling limits, RBI has fixed cut-off points that are two percentage points lower than the actual ceilings.
As per data on the BSE, the stake of FIIs in the bank stands at 24.89 per cent as of September 2013.
Karur Vysya scrips traded 1.88 per cent lower at Rs 344.90 per share as the close of market on BSE today.