JOIN USThe Finance Ministry on Thursday said it is looking at issues connected with HDFC Bank's proposal to raise FDI limit in it and will take a decision shortly.
"It is a very complex issue we are dealing with it but I can assure you we are seized of the matter," Economic Affairs Secretary Arvind Mayaram said when asked about HDFC Bank's FDI proposal.
Late last year, HDFC Bank had approached the Foreign Investment Promotion Board (FIPB) for increasing the foreign holding in the bank to 67.55 per cent from 49 per cent.
If the proposal of the bank to raise foreign investment to 67.55 per cent is accepted, it would exceed the cap of 74 per cent, after taking into account parent HDFC Ltd's stake.The Department of Economic Affairs (DEA) and DIPP (Department Of Industrial Policy & Promotion) are of view that promoter HDFC Ltd's 22.56 per cent stake in HDFC Bank is foreign investment.
Foreign entities, including FIIs, hold more than 77.36 per cent in HDFC Ltd.The foreign holding in a bank cannot exceed 74 per cent as per the existing norms.