India-based Axis Bank is seeking to raise its foreign institutional investment (FII) holding from existing 49% to 62%, a move that will make it a "foreign-owned" lender to be governed by foreign direct investment (FDI) policy.

The Foreign Investment Promotion Board (FIPB) has already approved the lender’s proposal to raise its FII , which would attract inflows of over INR62bn ($989m).

Through June 2013, the foreign institutional investment (FII) holding in the bank was 40.7%, while global depository receipts (GDRs) were 8.08%.

Following the approval from the Cabinet Committee on Economic Affairs, the lender and all its future investment in seven subsidiaries will be governed by the FDI policy.

The seven subsidiaries are Axis Capital, Axis Finance, Axis Private Equity, Axis Trustee Services, Axis Asset Management Company, Axis Mutual Fund Trustee and Axis UK.

According to the FDI policy, a downstream investment by an Indian company, which is not owned and controlled by a resident entity, into another Indian company would be in accordance with the relevant sectoral conditions on entry route.