IDFC pares FII limit to 51.5pc ahead of banking services
Jul 08 2014 , Mumbai
The company, which received a commercial banking licence in April, plans to start bank operations by October next year.
The banking regulations require that a bank should be floated by a domestic entity and it should pare foreign investor holding to 49 per cent to run banking services.
RBI said IDFC passed resolutions at the Board of Directors' level and a special resolution by the shareholders, agreeing for decreasing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs to 49 per cent before launching the banking services.
"The Reserve Bank of India notified that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs), through primary market and stock exchanges, can now purchase up to 51.50 per cent of the paid up capital of IDFC Limited under Portfolio Investment Scheme (PIS)," RBI said in a notification.
Earlier the foreign shareholding in the company was at 52.25 per cent.
FIIs, NRIs and PIOs (Persons of Indian Origins) can invest in primary and secondary capital markets in India through Portfolio Investment Scheme (PIS).
The RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis.