RBI Greenlights IFC's 9.7% Stake Acquisition in Federal Bank

3 Oct 2023 , 12:08 PM

The Reserve Bank of India (RBI) approves the International Finance Corporation (IFC) to acquire a 9.7% stake in Federal Bank. Federal Bank, based in Kerala, raised Rs 959 crore earlier this year through a preferential issue of shares to the World Bank Group member.

Federal Bank receives notification from RBI on September 28, 2023, granting approval for IFC’s acquisition of up to 9.70% stake in the bank, subject to specified conditions.

The approval is in response to IFC’s application to RBI, and compliance with other regulatory bodies is necessary for stake holding post approval.

RBI’s approval is contingent upon compliance with relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction, guidelines on share acquisition, Foreign Exchange Management Act, 1999, regulations by Securities and Exchange Board of India, and other applicable guidelines and statutes.

Federal Bank plans to open 100 additional branches in the fiscal year, emphasizing lending to small businesses. Last fiscal, the bank opened 75 branches, and a significant portion of its loan book is dedicated to SME loans, reflecting a 21% increase in the total loan book as of June 2023.

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