RBI has now allowed foreign investor to purchase of shares of HDFC Bank as the aggregate foreign shareholding of the bank through ADR, GDR, FPI, FDI, NRI and PIOs have fallen below the prescribed limit.
The Reserve Bank of India today notified that the aggregate foreign shareholding through American Depository Receipts (ADR)/ Global Depository Receipts (GDR)/ foreign institutional investors (FIIs)/ foreign portfolio investors (FPIs)/ foreign direct investment (FDI)/ non-resident Indians (NRIs)/ persons of Indian origin (PIOs) in HDFC Bank have gone below the prescribed limit stipulated under the extant FDI Policy. Hence, the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect, the apex bank said.
Soon after the removal of the ban the bank scrip saw hectic activity. HDFC Bank shares saw 6.6 % rise in scrip price at Rs 1415.70 on BSE.
RBI monitors the foreign investment in entities depending under the sectoral caps. The RBI removed the restrictions after the total foreign ownership in the bank fell below 72%. RBI’s cut-off points is 200 bps or two percentage point below the actual ceiling or overall limit.