The Reserve Bank of India has granted approval to 1729 Capital and its affiliated entities to hold a 7.14% stake in Suryoday Small Finance Bank (SSFB), according to recent exchange disclosures. As of September 30, 2025, the foreign portfolio investor (FPI) held 3.81% in the bank; the RBI’s nod now formally acknowledges the higher shareholding.
Approval Comes With Conditions on Future Share Changes
The central bank has set clear conditions for any future shifts in ownership.
- Any increase in shareholding or voting rights beyond the approved level will require fresh RBI approval.
- If the stake drops below 5% at any time, 1729 Capital must again seek approval before raising its holding back to 5% or higher.
These safeguards ensure regulatory oversight on significant movements in bank ownership by foreign investors.
Voting Rights Restriction Removed
Earlier, the investor was barred from exercising voting rights above 5%, even if its equity stake exceeded that threshold. With the RBI now recognising the 7.14% holding, that specific restriction has been lifted.
However, the approval does not grant any additional rights automatically—any future increase or structural change will still require clearance from the central bank.
Regulatory Compliance Remains Mandatory
The approval is subject to full compliance with India’s banking and foreign investment laws, including:
- Banking Regulation Act, 1949
- RBI’s norms on shareholding and voting rights in banks
- FEMA rules concerning foreign investment
- SEBI’s FPI regulations
These conditions will continue to apply as long as the stake is maintained.
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