The Foreign Investment Promotion Board (FIPB) today approved a proposal of Axis Bank to increase the limit on overseas holdings in the lender to more than 49 per cent.
The proposal was cleared at an FIPB meeting chaired by Economic Affairs Secretary Arvind Mayaram,sources said.
The FIPB approved raising the foreign equity holding in Axis Bank to 62 per cent from 49 per cent,subject to the condition that the holding of foreign institutional investors does not exceed 49 per cent.
At present,the FII holding in the bank is 40.7 per cent while domestic institutional investors have 8.77 per cent.
Axis Bank had approached the FIPB last month after the RBI said the limit of investments through Global Depository Receipts (GDRs),American Depository Receipts (ADRs),FDI,NRI and FIIs in the bank had breached the overall limit of 49 per cent of its paid-up capital.
Shares of Axis Bank closed at Rs 1,140.25,up 5.56 per cent on the BSE.