C.P. Sasidharan, zonal head of the bank, told reporters here that all that appeared in the media on the subject recently was hearsay and without knowledge of facts.
"The earlier rule for increasing foreign shareholding limit in the bank was through a two-third approval at the annual general meeting and then it goes to the board," said Sasidharan.
"But since April this year, the rules changed and one has to apply to the Foreign Investment Promotion Board (FIPB). When this application was done, there arose some misunderstanding and news surfaced that we are seeking foreign investors. The whole thing was mistaken and there are no plans at all to alter our structure," he said.
Following the application, the bank got the FIPB approval for hiking foreign shareholding limit in the bank to 74 percent (which includes 49 percent to Foreign Institutional Investors, 24 percent for NRIs and one percent to overseas corporates).
The FIPB approval was required to maintain status quo of the limits and hence the Reserve Bank of India asked the bank to get it cleared by the former.
"This has been the pattern since 2006 and one that has been approved by the RBI and there has been no change after that," Sasidharan said.
In the last fiscal, the Aluva-headquartered private sector Federal Bank crossed the magic figure of Rs.1 lakh crore as far as total business was concerned, which included both deposits and advances.
--IANS (Posted on 24-12-2013)