The bank said in a stock exchange filing that the private placement with IFC will not take place after it was informed by the IFC it needs more time to decide.

"However the IFC will continue to have close relations with the bank and provide technical know how to the bank," it said.

The bank earlier announced that another foreign investor which planned to take part in the private placement, ShoreCap International, had also pulled out.

The private placements were to take place at 117 rupees a share while the one for four rights issue is at 100 rupees.

Sampath shares were trading at 94 rupees Monday.

Sampath Bank said it plans to raise 1.7 billion rupees through the rights issue of 17.2 million shares to increase its capital base to keep pace with expansion. The bank now has 68.9 million issued shares.