Reserve Bank of India (RBI) has granted approval to the International Finance Corporation (IFC) to acquire a 9.7% stake in Federal Bank.
In July, the private-bank raised Rs 959 crore from IFC through a preferential issue of shares, a member of the World Bank group.
“Federal Bank has received an intimation from the Reserve Bank of India (RBI) on September 28, 2023, that it has accorded its approval to IFC for acquiring aggregate holding of up to 9.70% of the paid-up share capital or voting rights of the Bank subject to the conditions specified therein,” an exchange filing from the bank said on Friday.
“The approval has been granted with reference to the application made by IFC to RBI,” the filing said.
After the central bank’s approval, the stake holding is subject to compliance with other regulatory norms.
The 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, provisions of the Foreign Exchange Management Act, regulations issued by Securities and Exchange Board of India, and any other guidelines, regulations and statutes as applicable.
Earlier this month, the bank said that it will open 100 more branches in 2023-24 (April-March) as a part of its increasing focus on small businesses. The Kochi-based lender had opened 75 branches in 2022-23.