City Union Back up 7%, RBI hikes foreign investment cap

Shares of  City Union Bank  surged 7 percent intraday on Friday after Reserve Bank of India raised its limit of foreign investment. The central bank has increased foreign investment limit in City Union Bank to 40 percent, following which the restriction placed on purchase of shares of the firm by overseas investors has been lifted. "...the foreign shareholding by FIIs/RFPIs in City Union Bank has gone below the revised threshold limit stipulated under the extant FDI Policy. "Hence, the restrictions placed on the purchase of shares of the above company on July 18, 2014 are withdrawn with immediate effect," RBI said a release. Earlier the limit for such investment was 35 percent. The restiction was lifted after the company board passed resolution for purchase of equity shares by FIIs/RFPIs/QFIs up to 40 per cent (from 35 per cent earlier) of their paid-up capital. "Equity shares of City Union Bank can now be purchased through primary market and stock exchanges," RBI said.   At 11:02 hrs, the stock was quoting at Rs 83.20, up Rs 4.70, or 5.99 percent on the BSE.