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Blackstone gets India's central bank nod to buy Federal Bank stake

BY Reuters | ECONOMIC | 10:34 AM EST

Feb 5 (Reuters) -

The Indian central bank has approved private equity firm Blackstone's acquisition of up to ?a 9.99% stake in Federal Bank , the ?private lender said on Thursday.

The deal, ?which would make Blackstone ?the largest shareholder ?in the bank, adds to the growing list ?of large investments by ?marquee investors in the financial services sector in India.

Blackstone in ?October had agreed

to ?invest

around $700 ?million in Federal Bank for a 9.9% stake.

The private equity firm's investment ?will be done through a Singapore-based affiliate, with the agreement giving Blackstone the right to nominate a non-executive director to the lender's board, Federal ?Bank ?had said.

Dealmaking in India's private banking sector has

gained momentum

over the ?past year.

Dubai-based Emirates NBD agreed to buy a 60% stake in RBL Bank in October, while Japan's Sumitomo Mitsui Banking Corporation purchased a 20% stake in Yes ?Bank in May, followed by an additional 4.2% stake in September. ($1 = 90.2620 Indian rupees) (Reporting by ?Nishit Navin; Editing by Shreya Biswas)

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