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Business News/ Markets / Stock Markets/  RBI grants approval to IFC for acquiring 9.7% stake in Federal Bank
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RBI grants approval to IFC for acquiring 9.7% stake in Federal Bank

Earlier this year, the private sector lender had raised ₹959 crore via preferential issue of shares to the World Bank Group member.

Federal Bank (File image) Photo: MintPremium
Federal Bank (File image) Photo: Mint

The Reserve Bank of India (RBI) has granted approval to the International Finance Corporation (IFC) to acquire a 9.7 per cent stake in Federal Bank. Earlier this year, the Kerala-based private sector lender had raised 959 crore via preferential issue of shares to the World Bank Group member.

‘’The Federal Bank Ltd has received an intimation from the Reserve Bank of India on September 28, 2023, that it has accorded its approval to International Finance Corporation (IFC) for acquiring aggregate holding of up to 9.70 per cent of the paid-up share capital or voting rights of the Bank subject to the conditions specified therein,'' said Federal Bank in a regulatory filing to the stock exchanges on Friday.

‘’The approval has been granted with reference to the application made by IFC to RBI,'' added the bank in its statement. After the central bank's approval, the stake holding is subject to compliance by other regulatory bodies.

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‘’The aforesaid approval granted by RBI is subject to the compliance with the relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies dated January 16, 2023 (as amended from time to time), provisions of the Foreign Exchange Management Act, 1999, regulations issued by Securities and Exchange Board of India, and any other guidelines, regulations and statutes as applicable,'' said Federal Bank in its filing.

Meanwhile, Federal Bank had said earlier this month it will open 100 more branches this fiscal as part of its increasing focus on lending to small businesses.

The Kochi-based lender had opened 75 branches last fiscal, its executive director Malini Warrier told reporters here on the sidelines of the three-day global SME financing summit organised by the developmental lender Sidbi.

She said one-third of its total loan book of 1,86,593 crore as of June 2023, which rose close to 21 per cent on-year, was SME loans, and so are the retail and wholesale books. "The idea of focusing on SMEs is that we should be growing in sectors of the economy which is growing faster or which has more credit needs. And the fast growing industry segment in terms of credit is SMEs.

At 2:45 pm, shares of Federal Bank were trading 0.65 per cent higher at 147.05 apiece on the BSE.

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Published: 29 Sep 2023, 02:43 PM IST
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