Cabinet clears HDFC Bank’s proposal to raise Rs 24,000 crore via FDI

New Delhi : The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the proposal for grant of permission to M/s. HDFC Bank Ltd. to raise additional share capital of up to a maximum of Rs. 24,000 crore.

This includes premium, over and above the previous approved limit of Rs 10,000 crore, that the composite foreign shareholding in the bank should not exceed 74 per cent of the enhanced paid-up equity share capital of the bank, Finance Minister Piyush Goyal said after the Cabinet meeting chaired by Prime Minister Narendra Modi.

With the raising of this capital, FDI in the bank will hit the regulatory ceiling of 74 per cent, he said.

As per the RBI guidelines, foreign holding in public sector banks in India cannot go beyond 74 per cent.

“The decision would ensure that the composite foreign shareholding in the bank inclusive of all types of foreign investments, both direct and indirect, will not exceed 74 per cent of the enhanced paid-up equity share capital of the bank,” the minister said.

The proposed investment is expected to strengthen the capital adequacy ratio of the bank.It is to be noted that the Cabinet in 2015 cleared a proposal of HDFC Bank to raise Rs 10,000 crore from foreign investors.

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