The Reserve Bank of India today notified that the ING Vysya Bank Ltd. has passed a resolution in its board of directors’ Meeting and a resolution in its Annual General Meeting agreeing for the purchase of its equity shares by FIIs up-to 30% of their paid-up capital through primary/secondary markets in India.

The Reserve Bank of India further advised that its approval to the ING Vysya Bank Ltd. for raising FII investment limit to 30% is subject to the condition that aggregate foreign investment in the bank should also not exceed the composite sectoral cap of 74% as prescribed by the Government from time to time. The restrictions placed relating to investment on behalf of FII/NRI/PIO vide RBI letter No. FE.CO. FID /5330/ 11.01.091 /2010/11 dated August 30, 2010 may be treated as withdrawn.

It is also advised that the existing prior approval applications for purchase of shares received through custodian banks of FIIs pending with Reserve Bank of India which could not be processed due to unavailability of limit/headroom, such investors are free to invest within the enhanced ceiling.

As the ING Vysya Bank Ltd.has now passed the necessary resolutions in this regard as required in terms of the above mentioned Government Press Note, equity shares of the ING Vysya Bank Ltd. can now be purchased through primary market and stock exchanges provided:

The purchase of equity shares by a single FII/SEBI approved sub-account of a registered FII in ING Vysya Bank Ltd. shall not exceed 10% (Ten percent) of the paid-up equity capital of the bank. It may be ensured that the investments made are within the stipulated ceilings. The purchases should be made subject to the other terms and conditions stipulated by RBI.

The Reserve Bank will henceforth be monitoring the FII investments under Portfolio Investment Scheme (PIS) at sectoral cap/statutory ceiling as applicable and not the intermediate ceiling fixed by the above indicated bank. It will be the ING Vysya Bank’s responsibility to ensure that the applicable cap is not breached. The permission is being issued from FEMA angle only.

It may be noted that the present policy of Department of Banking Operations and Development (DBOD) requires RBI acknowledgement for acquisition / transfer of shares of 5% and more of a private sector bank by FIIs, based upon policy guidelines on acknowledgement of acquisition / transfer of shares issued on February 3, 2004.

R. R. Sinha
Deputy General Manager

Press Release : 2012-2013/1126