Mumbai, June 20 :    Mumbai, June 20:  The ING Group today sealed a deal to buy 23.99 per cent in Vysya Bank from the GMR Group, the Indian promoter, in what is the first acquisition of a private bank in the country by a foreign bank. The Dutch financial powerhouse will fork out Rs 626.92 per share - a whopping 98 per cent premium on the stock's closing price of Rs 315.95 on the Bombay Stock Exchange today - in a transaction worth Rs 340.8 crore. The deal is reckoned to be the largest slice of foreign direct investment (FDI) in banks, and the first after the FDI cap for the industry was raised to 49 per cent. Once the deal goes through, ING will hold 43.99 per cent as the bank's single largest shareholder. International Finance Corporation already holds 10 per cent.' The price of Rs 626.92 per share for the 70-year-old bank surprised banking analysts and industry watchers, but other shareholders were dismayed when ING claimed it would not have to make an open offer. The group argued the share transfer from a promoter to a foreign collaborator, who is also a shareholder, obviates the need to give other investors a chance to sell out. The Reserve Bank regulation capping FDI in banks at 49 per cent of equity has queered the pitch further. The purchase of GMR's stake marks the end of a process that started in February this year, when Bank Brussels Lambert, part of the ING group, indicated it would increase its stake in the Bangalore-based Vysya Bank. 'We believe we are paying for a value already existing in the bank. The ING Group is, therefore, paying for the bank's future potential, which is enormous,' an ING group spokesperson told The Telegraph. Vysya Bank, with 480 branches, is seen as more of a regional player since its network is largely confined to the south. That focus, the ING official said, is likely to stay for now. 'ING is committed to developing its banking, insurance and asset management businesses in India, and has identified Vysya Bank as a vehicle to further the growth strategy. It provides us a strong banking platform to distribute our financial services products more widely to Indian retail customers, small and medium-sized enterprises and institutional clients,' said Peter Smyth, general manager of ING Asia Pacific. Senior officials of the GMR Group said the stake sale would help them shift emphasis to its core areas of infrastructure, information technology and agri business. Even after that, it would hold 4.5 per cent in the bank. Vysya Bank, established in 1930, initially financed traders and retail customers. It is reported to be the first private sector bank to introduce MICR cheques, float a housing subsidiary and enter the credit card business. The ING Group, a global financial institution based in the Netherlands, is a market leader in insurance, banking and asset management. It has more than 50 million customers and assets over 700 billion euros. In India, ING is active in banking, insurance and asset management. The wholesale banking arm under ING Bank N.V. offers lending and structure finance products, M&A advisory and capital market origination products. Insurance venture The ING Group will emerge as the largest stakeholder in Vysya, but crucial questions have been thrown up about the equity structure of its insurance venture. ING Vysya Life, a 24:76 life insurance joint venture, will now have to grapple with a key IRDA norm that limits the stake of a foreign partner at 26 per cent of equity.