The Reserve Bank of India notified on September 4 that the foreign share holdings in Axis Bank have gone below the threshold limit (49 percent) stipulated under the extant FDI policy.
Axis Bank shares are on buyers' radar after the Reserve Bank of India (RBI) withdrew curbs on foreign equity investment in the bank.
The Reserve Bank of India notified on September 4 that the foreign share holdings in Axis Bank had gone below the threshold limit (49 percent) stipulated under the extant FDI policy. Hence, the restrictions on the purchase of shares of the above company are withdrawn with immediate effect, the central bank said.
Total foreign shareholding in the third largest private sector bank was 48.96 percent as of June 2013, out of which foreign institutional investors hold 40.70 percent.
The rally in banks today was also on the back of measures announced by new RBI governor Raghuram Rajan to liberalise and modernise the Indian banking system.
At 13:07 hours IST, the stock was up 13.58 percent to Rs 911 amid high volumes on the Bombay Stock Exchange.
It lost 19 percent in past one month, underperforming the Sensex that fell just 1 percent during the same period.
In fact, the entire banking space was weak since July 15 when the RBI announced rupee measures to reduce excess liquidity in the market.
Meanwhile, recently the stock was excluded by the MSCI from its standard and large cap indices.