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Private sector lender Axis Bank on Tuesday requested the foreign investment promotion board (FIPB) to increase the limit of foreign shareholding in the bank from the current 49%. The bank did not specify whether it is seeking to raise the foreign shareholding limit to maximum permissible limit of 74% applicable for private banks.
The move comes in repsonse to the Reserve Bank of India’s (RBI) notification last week restricting foreign institutional investors (FIIs) from purchasing any further shares in Axis Bank as the overall foreign sharegholding had crossed the limit of 49%.
According to Axis Bank, the foreign shareholding in the bank as on June 30 was 48.96% which included investments through the foreign direct investment (FDI) route in the form of global depository receipts of 8.08% and other foreign holdings including FIIs of 40.88%.
The bank has written to FIPB requesting an extension in the shareholding limit, it said in a statement.
On Tuesday, Axis Bank stock ended at R980.45, down 0.68% from the previous close on Bombay Stock Exchange (BSE). In its notification, RBI had said "foreign shareholding by global depository receipt (GDR), asset development reserve (ADR), foreign direct investment (FDI), non-resident Indian (NRI), persons of Indian origin (PIO) and foreign institutional investors (FIIs) in Axis Bank crossed the overall limit of 49% of its paid-up capital”.
Thereby, no further purchases of share of this bank would be allowed through stock exchanges in India on behalf of these entities, the banking regulator said in notification.