FIPB defers Kotak Mahindra Bank proposal for raising FII limit

NEW DELHI: An inter-ministerial panel today deferred Kotak Mahindra Bank's proposal for raising foreign investment limit in the bank to 55 per cent.

The Foreign Investment Promotion Board (FIPB) has decided to defer the proposal of Kotak Mahindra Bank, sources said.

The panel - headed by Finance Secretary Rajiv Mehrishi - considered 30 proposal and cleared 22 of them, they said, adding that FIPB has rejected Inx Music's proposal.

Private sector lender Kotak had approached FIPB to seek the nod for raising foreign investment cap in the bank to 55 per cent.

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

Investments from FIIs, FPIs and foreign banks have 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.

During April-January, 2014-15, FDI in India increased 36 per cent year-on-year to $ 25.52 billion.

Government has taken a slew of steps in recent times to liberalise policies for foreign investors in the country. FDI cap in defence and insurance has been increased, while the railways sector has been opened for foreign investment.