The Reserve Bank of India (RBI) said that FIIs purchase of equity shares in City Union Bank has been raised to 40% from earlier limit of 35% of their paid-up capital through primary and secondary markets in India.

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 Hence, the restrictions placed on the purchase of shares of the above company on July 18, 2014 are withdrawn with immediate effect, RBI said.

RBI approval to the City Union Bank for raising FIIs/RFPIs/QFIs investment limit to 40% is subject to the condition that aggregate foreign investment in the bank should also not exceed the composite sectoral cap of 74% (49% under automatic route (including indirect foreign investment) & beyond 49% to 74% under government route) as prescribed by the Government from time to time.

Shares of the company gained Rs 5, or 6.37%, to trade at Rs 83.50. The total volume of shares traded was 80,928 at the BSE (11.04 a.m., Friday).