FIPB defers Kotak Bank's proposal to hike FDI limit

NEW DELHI: FIPB today deferred a proposal of Kotak Mahindra Bank to increase foreign investment limit to 55 per cent.

"We have not received comments from department of financial services on Kotak Bank proposal and so it was deferred by the FIPB," a senior Finance Ministry official said.

Private sector lender Kotak had approached Foreign Investment Promotion Board (FIPB) to seek the nod for raising foreign investment cap to 55 per cent.

The FIPB, headed by Finance Secretary Rajiv Mehrishi, however, cleared the proposals of Den Networks, Biocon and Torrent Pharma.

The Reserve Bank has barred overseas investments in Kotak Bank after foreign shareholding hit the permissible threshold following its merger with ING Vysya Bank.

Investments from FIIs, FPIs and foreign banks had reached 48.55 per cent in the merged entity.

FIPB is a single window clearance system for proposals on FDI. India allows FDI in most of the sectors through automatic route, but in certain segments considered sensitive for the economy and security, the proposals have to be first cleared by FIPB.