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IFC invests in Federal Bank, gets 4.99% stake

International financing firm IFC and 2 of the funds managed by it have made an equity investment of $126 trillion in Federal Bank to support the bank’s commitment to environmental, social and governance (ESG) standards. The 2 funds are LP and IFC Emerging Asia Fund. The investment enables IFC to have a 4.99% stake in the bank. The investment will also strengthen the bank’s Tier 1 capital adequacy ratio (CAR) and help expanding its micro, small and medium sized enterprises (MSME) and climate finance portfolios – key for growth opportunities as the country recovers from the pandemic.  Shyam Srinivasan, MD & CEO of the bank, said after the bank’s board approved issuance of shares to the IFC group to an extent of 4.99% of the bank’s paid-up capital, IFC has become a significant shareholder of the bank. The addition of this marquee name to the list of the bank’s prominent shareholders reinforces the trust and confidence reposed by the IFC group on the bank and its management, he added. The equity investment is expected to see Federal Bank grow and strengthen its ESG portfolio, with increased green portfolio financing for projects including energy efficiency, renewable energy, climate smart agriculture, green buildings, and waste management.

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