The Competition Commission of India (CCI) has approved Blackstone’s plan to pick up a 9.99% stake in Federal Bank via warrants.

The US-based private equity giant will invest through its affiliate, Asia II Topco XIII, which will subscribe to warrants that can be converted into an equal number of fully paid equity shares of Federal Bank, the CCI said in a statement.

Once all the warrants are exercised, Asia II Topco XIII will own 9.99% of Federal Bank’s paid-up share capital on a fully diluted basis.

Under the terms of the deal, Blackstone will be entitled to nominate one director to Federal Bank’s board, provided its shareholding remains at or above 5%.

Asia II Topco XIII is controlled by funds advised or managed by affiliates of Blackstone.

Federal Bank is a private sector commercial bank in India that provides payment services, deposits, loans, and other banking products.

Blackstone had earlier said it would invest Rs61.9bn (about $705m at the time of announcement) in the Kochi-headquartered private lender.

The transaction adds to a recent wave of strategic and financial investments in India’s private banking space.

In October, Dubai-based Emirates NBD agreed to buy a 60% stake in RBL Bank for close to $3bn.

Japan’s Sumitomo Mitsui Banking Corporation has also been increasing its exposure to Indian banks, acquiring 20% in Yes Bank in May and subsequently adding another 4.2% in September.

In a separate development, Mitsubishi UFJ Financial Group’s consolidated subsidiary MUFG Bank recently signed an investment agreement with Indian non-banking financial company Shriram Finance to subscribe to a preferential allotment of 20% equity shares.

The total investment is valued at approximately Rs396.2bn, pending regulatory clearance.