The Reserve Bank of India (RBI) has given approval to International Finance Corporation (IFC) to acquire a 9.7% stake in Federal Bank. 

In July, the Kerala-based private sector lender raised Rs 959 crore via preferential issue of shares to the World Bank Group member.

“Federal Bank has received an intimation from the RBI on September 28, 2023, that it has accorded its approval to IFC for acquiring aggregate holding of up to 9.70% of the paid-up share capital or voting rights of the bank subject to the conditions specified therein,” the lender said in a regulatory filing to the stock exchanges on Friday.

“The approval has been granted with reference to the application made by IFC to RBI,” the bank added.

After the central bank’s approval, the stake holding is subject to compliance with other regulatory bodies.

The approval granted by the RBI is subject to the compliance with the relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction and Guidelines on Acquisition and holding of shares or Voting Rights in Banking Companies, provisions of the Foreign Exchange Management Act, regulations issued by Securities and Exchange Board of India, and any other guidelines, regulations and statutes as applicable.

Earlier this month, the bank said that it will open 100 more branches in FY24 as part of its increasing focus on lending to small businesses. The Kochi-headquartered lender had opened 75 branches in the previous fiscal.