The Reserve Bank of India has reportedly rejected HDFC Bank's plea to declassify its parent Housing Development Finance Corporation Limited (HDFC) as a foreign institutional investor (FII).
India’s largest lender by market capitalisation, HDFC Bank had requested the government to declassify HDFC, and the government, in turn, wrote to RBI seeking its opinion on the matter, CNBC-TV18 reported.
The RBI, however, has rejected the request citing current rules which require HDFC to be classified as FII. The move will have an impact on HDFC Bank's fund raising programme from qualified institutional placement (QIP). FIIs being barred from investing in the bank will limit the fund raising options as it can only be raised from domestic investors.
The promoter’s holding in HDFC Bank as of September quarter stands at 25.73 percent with HDFC holding 18.63 percent in the bank.
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