New Delhi– India’s cabinet on Tuesday permitted up to 74 percent foreign holding in Axis Bank, the country’s third largest in the private sector, from the current approved level of 62 percent.

The decision was taken at a meeting here of the Cabinet Committee on Economic Affairs, presided over by Prime Minister Narendra Modi.

“With the approval, foreign direct investment to the tune of Rs 12,973.14 crore will be received in the country with an estimated creation of 6,000 to 7,000 jobs over the next three years,” a cabinet statement said after the meeting.

“The foreign investment will be by way of foreign institutional investors, foreign portfolio investors, non-resident Indians, foreign director investment covering American depository receipts and global depository receipts, and indirect foreign investment,” the statement added.

The news came after the close of trading session in Indian bourses, where the shares of the bank fell Rs 4.30 percent, or 0.79 per cent, to Rs 539.60.

As per information available with the stock exchanges, the promoters hold 30.76 percent in Axis Bank, while 69.24 per cent is held by the public, as on March 31 this year.

The entire shares of the promoter group are held by banks and financial institutions, including 15.15 per cent by Life Insurance Corp and 11.93 per cent by the administrator of Unit Trust of India.

Then, within the public shareholding, foreign portfolio investors hold 42.27 per cent, domestic mutual funds hold 10.58 percent and non-institutional individuals another 10.63 per cent.

One of the first private sector banks in India, the entity started operations in 1994 as UTI Bank and eventually became Axis Bank. The operations are overseen by Shikha Sharma, Managing Director and Chief Executive.

The announcement also came on a day when Fitch Ratings affirmed a viability rating of ‘bbb-‘ to Axis Bank, thanks to its stronger core capitalisation, superior profitability and improving liability profile.

“Axis Bank is India’s third-largest private sector bank and its strong franchise and market position also underpin its viability rating.”