Silver (IFC-45113)

  • South Asia
Geographic location where the impacts of the investment may be experienced.
  • India
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jul 20, 2021
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 43.37 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 43.37 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS May 6, 2022

Disclosed by Bank Jun 17, 2021

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the bank document, the proposed project comprises a  primary equity investment for a 4.99 percent stake in Federal Bank Limited (FBL or the Bank), the seventh largest private sector bank in India, for approximately US$126 million, by International Finance Corporation (IFC), IFC Financial Institutions Growth Fund, LP (FIG), and IFC Emerging Asia Fund, LP (EAF). This investment seeks to strengthen the capital adequacy of the Bank's Tier 1 for growth opportunities post-COVID-19 specifically in the MSME and climate finance.

FBL is headquartered in Aluva, Ernakulam, Kerala and has 1,272 branches across India.

The proposed transaction is subject to all required approvals. To further strengthen the Bank's E&S capacity, IFC will also implement a one-year E&S technical advisory program.

IFC will provide both financial and non-financial additionality to FBL through this Project. Financial additionality will be provided in the form of: (i) Own Account Primary Equity from IFC and (ii) Resource Mobilization, derived from mobilization of additional funding from its asset management company. With respect to non-financial additionality, IFC will help the Bank in terms of: (i) Knowledge, Innovation and Capacity Building by helping the Bank develop its climate strategy and grow its green lending portfolio, and (ii) Setting standards as IFC assists the Bank to improve its environmental and social (E&S) risk management and environmental, and social governance (ESG) compliance.

The proposed Project entails an equity investment in FBL. The Bank is involved in providing long and medium-term financing to corporates, and MSMEs by way of working capital, term loans, and to a lesser extent project and structured finance, and syndications. It also provides several short-term products as well as non-funded products like bank guarantees. Given the Bank's size and diversity of operations, it has exposure to companies operating in high-risk sectors such as infrastructure, chemicals, heavy industries, and large plantations. Some of these sectors and industries, by the nature of their operations, may have high E&S risks and impacts such as those related to Occupational Health and Safety, environment, community health and safety, biodiversity, cultural heritage, involuntary resettlement, and Indigenous Peoples. Hence, the Project has been categorized as FI-1 in accordance with IFC's Environmental and Social Sustainability Policy. The Bank has exposure to coal-related projects and activities (3.5 percent of its portfolio as of March 31, 2021). This exposure will be required to be reduced by 50 percent of the current exposure percentage by 2025 and to be zero by 2030. The Bank has committed to reduce its exposure accordingly and in alignment with its focus on sustainability, agreed to terminate financing of development of any new coal-related assets, including coal-fired power plants once IFC becomes a shareholder in the Bank. In addition, the Bank has agreed to disclose in its annual reports information on Category A projects (the name, location by city, and sector) committed after IFC investment as well as the Bank's exposure to coal related projects as a percentage of its portfolio. The applicable performance requirements to manage the E&S risks of the Bank's activities will be: i) the IFC- FI Exclusion List; ii) the host country E&S laws and regulations; and iii) IFC Performance Standards.


People Affected By This Project
People Affected By This Project refers to the communities of people likely to be affected positively or negatively by a project.

Stakeholders impact: Improved access to finance for MSMEs and climate: The MSME sector is extremely critical for the development of the country by way of production, employment, and exports. However, close to 11 million MSMEs remain either fully or partially excluded from the formal financial system, with an estimated financing gap of ~US$400 billion. The proposed investment will support the Bank in increasing funding to the MSME sector. Further, India requires substantial financing to meet its NDC commitments and grow climate finance. IFC expects that this Project will contribute towards a reduction of the climate financing gap in India by supporting the growth of FBL's climate finance portfolio for renewable energy, climate smart agriculture, green buildings, and waste management projects. The investment will also support FBL in reducing coal exposure.

Market impact: Beyond the Project level outcomes, IFC anticipates the investment to promote greater resilience in the market via innovation, demonstration, and replication channels. This approach is expected to demonstrate the viability of MSME lending and inspire other FIs to follow suit.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

FBL was established in 1931 as Travancore Federal Bank and re-branded itself as Federal Bank Limited in 1949. The Bank has a well-diversified shareholding structure. As of March 31, 2021, 30.23 percent of the Bank's shares were held by mutual funds, 24.51 percent by foreign portfolio investors, 11.81 percent by FIs (including insurance companies), 29.82 percent by individual investors, and the remaining 3.63 percent by others.

FBL has an asset base of US$28 billion as of March 2021 , equity of US$2.3 billion and a market capitalization of approximately US$2.3 billion as of June 9, 2021. The Bank has a diversified loan book comprised of retail, agricultural, MSMEs and corporate loans. FBL's branch network of 1,272 branches, and automated teller machine (ATM) network of 1,957 is spread across India with 66 percent of branches in semi-urban and rural India and the remaining in urban and metropolitan India. The Bank through its vast network reaches the underserved segments and addresses their financing needs through its diverse products and services.

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Federal Bank Limited:
Anand Chugh
Vice President, Marketing & Investor Relations
+91 22 61748715
Aluva Eranakulam, Kerala – 683101



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The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at You can learn more about the CAO and how to file a complaint at

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