IDFC not eligible for bank licence

IDFC not eligible for bank licence

Infrastructure financing firm IDFC, which has applied to the Reserve Bank of India for a bank licence, on Thursday said it is not eligible to obtain one as foreign shareholding in the institution exceeds the permissible limit of 50 per cent and is working to meet the norms.

IDFC said in a BSE filing that the institution would endeavour to bring down the foreign shareholding to below 50 per cent in case it gets bank licence from the RBI.

IDFC is one of the 25 applicants for new bank licence, the licences are likely to be issued next year.

“The Board of Directors on December 19, passed a circular resolution approving postal ballot process for seeking an enabling resolution from the shareholders to authorise the board...to keep reducing ceiling limit of the foreign shareholding from existing 54 per cent to 49.9 per cent in various stages...,” IDFC said in its filing.

It further said that in case it does not receive the bank licence from RBI, it “will take steps to reinstate the ceiling on the foreign shareholding back up to 74 per cent.

The RBI guidelines require that the eligible promoters of a bank should to be ‘owned and controlled by residents’.

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