Increase in Foreign investment limit/ceiling in an Indian Company under PIS-FIIs - Removal from the Ban List: M/s City Union Bank Limited
May, 09th 2014
The Reserve Bank of India today notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 35 per cent of the paid up capital of M/s City Union Bank Limited under the Portfolio Investment Scheme (PIS). M/s City Union Bank Limited has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs).
This approval is given subject to the condition that the onus of compliance with FDI policy and FEMA regulations including downstream investment would continue to remain on the Indian company, M/s City Union Bank Limited.
It is also advised that for FII/RFPI/QFI and NRI under Portfolio Investment Scheme, individual ceiling shall be 5% respectively and aggregate limit for all RFPI/FII/QFI shall be 35%.
M/s City Union Bank will have to monitor individual limits of FII/FPI/QFI & NRI and also ensure that at no time its total foreign investment (direct as well as indirect) exceeds 49%, beyond which, it should seek prior FIPB approval.
Further, the Reserve Bank notified that the foreign share holding by Foreign Institutional Investor (FIIs), in M/s City Union Bank Limited have gone below the revised threshold limit stipulated under the extant Foreign Direct Investment (FDI) Policy. Hence, the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect.