FIIs need RBI nod to buy further shares in IndusInd Bank

MUMBAI: Foreign investors would now have to get prior permission from the Reserve Bank for buying shares in IndusInd Bank as such investment limit in the entity has reached the trigger limit.

The Reserve Bank of India ( RBI) today said foreign shareholding through foreign institutional investors, NRIs, persons of Indian origin or via foreign direct investment in IndusInd Bank has reached the trigger limit.

"Hence, further purchases of equity shares of Induslnd Bank would be allowed only after obtaining prior approval of the Reserve Bank of India," RBI said in a release.

Under the portfolio investment scheme, FIIs are allowed to buy up to 49 per cent of the paid-up capital in the bank through primary or secondary markets subject to aggregate foreign investment limit not exceeding sectoral cap of 74 per cent.

RBI tracks ceilings on investments by FIIs, non-resident Indians and persons of Indian origin on a daily basis.

The cut-off limit has been set at two percentage points lower than the actual ceiling. When the net equity investment in a company reaches cut-off level, additional buying of shares will require RBI's approval.

As per data available on BSE, FIIs held 41.13 per cent shares in IndusInd Bank as of quarter ended December 2013.

Shares of IndusInd Bank fell 1.57 per cent to Rs 507.4 at the close on the BSE today.