The government’s approval to the proposal of HDFC Bank for raising overseas shareholding limit to 67.55% may get delayed as the commerce & industry ministry is scrutinising all foreign investments made in the bank.
The DIPP, which deals with foreign investment matters, is looking into each and every investment in the bank, including those through its parent entity HDFC to ascertain the actual quantum of overseas investment in the bank, sources said.
Last year, HDFC Bank had approached Foreign Investment Promotion Board (FIPB) for raising foreign holding in the bank to 67.55% from 49%.
As per existing norms, a bank is required to take the approval of FIPB for increasing its foreign shareholding limit (FII and FDI) beyond 49% cent and up to 74% The investment till 49% can be done through the automatic route. As of December 2013, foreign shareholding in the bank was at 52.18%.