The Cabinet Committee on Economic Affairs (CCEA) on Wednesday cleared a proposal of HDFC Bank to raise Rs10,000 crore from foreign investors. The meeting, chaired by Prime Minister Narendra Modi, approved the HDFC Bank proposal that will raise its foreign holding to 74 per cent, enabling inflow of around Rs10,000 crore from overseas investors, an official statement said.
Total foreign investment in HDFC Bank was 73.39 per cent at the end of June 2014. It had come down to 73.2 per cent at the end of September. The funds would be raised by issuing shares to non- resident Indians or FIIs or foreign portfolio investors subjected to aggregate foreign shareholding not exceeding 74 per cent of the post issue paid up capital, said the statement.
"The approval would result in foreign investment of Rs10,000 crore (approximately) in the country," it said. As per the norms, FIPB can only take up FDI proposals up to Rs1,200 crore. Beyond that, they are sent to CCEA for clearance last month, the Foreign Investment Promotion Board cleared the HDFC Bank proposal for expanding its equity base by up to Rs10,000 crore.
Earlier, in November, FIPB had cleared the long-pending proposal of HDFC Bank to hike foreign holding to 74 per cent.