The Reserve Bank of India (RBI) on Monday restricted foreign institutional investors (FIIs) from buying additional shares in HDFC Bank, the country's second-largest private lender, as their shareholding has exceeded the limit.
Stakes held by overseas investors, including FIIs, non-resident Indians (NRIs), persons of Indian origin (PIOs), foreign direct investment and global depository receipts, in HDFC Bank have crossed the ceiling of 49 per cent of its paid-up capital, the RBI said in a release.
No further purchases of the bank's shares will be allowed through the stock exchanges on behalf of overseas investors, it said.
FIIs, NRIs and PIOs are allowed to invest in the primary and secondary capital markets through the portfolio investment scheme, under which they can acquire shares and debentures of Indian companies through the stock exchanges.
The apex bank monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis.
For effective monitoring of foreign investment ceilings, the RBI has fixed cut-off points that are two percentage points lower than the actual limits.
Shares in HDFC Bank, on Monday, ended at Rs. 682.65 apiece on the BSE, down 1.12 per cent from the previous close.