MUMBAI, June 27 (Reuters) - Fairfax India Holdings Corp ( FFXDF )

said on Thursday its wholly-owned subsidiary, FIH

Mauritius Investments, sold a 9.7% stake in Indian private

lender CSB Bank to comply with regulatory norms.

The proceeds of the sale amounted to 5.9 billion rupees

($70.7 million) in gross terms, Fairfax India ( FFXDF ) said in a release.

After the sale, Fairfax India's ( FFXDF ) stake in Kerala-based CSB

Bank will reduce to 40% from 49.72% at the end of March.

Toronto-based Fairfax India Holdings ( FFXDF ) is backed by Canadian

billionaire Prem Watsa and invests in public as well as private

equity securities and debt instruments in India.

In November, FIH Mauritius Investments received approval

from the Reserve Bank of India to bring down its shareholding in

CSB Bank to 26% within 15 years, instead of 15% as advised by

the central bank earlier.

CSB Bank's shares were up 4.1% in early trade on Thursday.

($1 = 83.5050 Indian rupees)