Federal Bank gets RBI nod to sell 45 pc stake in NBFC arm to True North

New Delhi: Federal Bank on Monday said the Reserve Bank has approved proposal to sell up to 45 per cent stake in NBFC arm Fedfina to private equity firm True North.

Earlier in May, the board of the private sector bank had approved 26 per cent strategic investment by True North in Fedbank Financial Services Ltd (Fedfina).

"True North can further acquire additional equity shares of Fedbank Financial Services Ltd, constituting up to 45 per cent of the share capital in the company," Federal Bank said in a regulatory filing.

The lender said that Reserve Bank earlier last week gave approval for the proposed transactions. Fedfina is a 100 per cent fully owned subsidiary of the bank.

FedFina is engaged in providing loans to individual and corporate borrowers, against the security of assets like gold and real estate property, for meeting personal and business expense and investment needs.

The operations of the company are in Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, West Bengal, Rajasthan, Delhi, Gujarat and Maharashtra. Federal Bank stock closed 2.78 per cent up at Rs 70.20 on BSE.