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Federal Bank to sell 26% stake in nonbank unit to private equity firm

India's Federal Bank Ltd. agreed to sell a 26% stake in Fedbank Financial Services Ltd. to private equity fund True North Enterprise Pvt. Ltd.

The bank did not disclose financial terms of the transaction. Under definitive agreements, Fedbank Financial Services will issue new shares to a fund managed by True North Enterprise, the bank said May 11.

The transaction is subject to statutory and regulatory approval.

Fedbank Financial Services mostly offers home, auto and gold loans.

Meanwhile, Federal Bank received approval from the Reserve Bank of India to acquire a 19.90% stake in Equirus Capital Pvt. Ltd. The statement came after the bank in February said it was looking to acquire up to 26% in the investment bank.