RBI limits FDI to 49% in Equitas Holdings

The Dollar Business Bureau

The Reserve Bank of India (RBI) on Wednesday notified that aggregate foreign investment limit in Chennai-based Equitas Holdings, which got an in-principle approval for small finance bank, should not exceed 49 percent.

In September 2015, Equitas Holdings was among the 10 enterprises to have been granted in-principle approval from the central bank for setting up small finance banks.

According to the RBI's notification, foreign investment in small finance banks would be in accordance with the FDI policy for private banks.

A release by RBI stated that the overall investment limit in Equitas Holdings under the Portfolio Investment Scheme for foreign portfolio investors (FPIs)/foreign institutional investors (FIIs) shall remain at 24 percent and for non-resident Indians (NRI), the ceiling should be at 10 percent.

“For total foreign investment from all sources such as Global Depository Receipts (GDR), American Depository Receipts (ADR), Foreign Direct Investment (FDI), Foreign Institutional Investors (FIIs), Registered Foreign Portfolios Investors (RFPIs), Persons of Indian Origin (PIOs), Non-Resident Indians (NRIs), the limit should not exceed 49 percent,” the release said.

The release also specified that the RBI had notified it under the Foreign Exchange Management Act (FEMA) 2000.