The government on Wednesday gave approval to HDFC Bank to raise Rs 24,000 crore in foreign direct investment (FDI) to fund its business growth. With the raising of this capital, FDI in the bank would hit the regulatory ceiling of 74 per cent, Finance Minister Piyush Goyal said after the Cabinet meeting chaired by Prime Minister Narendra Modi here.Also Read - Piyush Goyal to be Leader of House in Rajya Sabha, Rahul Gandhi May Lead Congress in LS: Report

Currently, the FDI in the banks stands at 72.62 per cent. Also Read - Poll Strategist Prashant Kishor Meets Rahul Gandhi in Delhi, Punjab Elections Likely on Agenda

Of the additional Rs 24,000 crore, Rs 8,500 crore is proposed to be allotted to HDFC Ltd, the promoter, on a preferential basis. Also Read - International Travel Update: Germany, Norway And Iceland Reopens Visa Application Centres in India

“The decision would ensure that the composite foreign shareholding in the bank inclusive of all types of foreign investments, both direct and indirect, will not exceed 74 per cent of the enhanced paid-up equity share capital of the bank,” the minister said. The proposed investment is expected to increase capital adequacy ratio of the bank, he said.

The approval is subject to Foreign Direct Investment Policy and other sectoral regulations.

Of the total amount raised, Rs 8,500 crore is proposed to be allotted to HDFC Ltd, the promoter of the bank, on a preferential basis.