MUMBAI: HDFC Bank has received approval from RBI to increase its stake in six banks: Axis, Suryoday Small Finance, ICICI, Bandhan, IndusInd, and Yes Bank.
The private lender and its affiliated entities, including HDFC Mutual Fund, HDFC Life Insurance, HDFC Ergo General Insurance, have been permitted to acquire an aggregate holding of up to 9.5% of the share capital or voting rights in the six banks.
These approvals stem from applications submitted by HDFC Bank, acting as a promoter/sponsor of the group, to RBI on Dec 18, 2023. RBI norms require that once any entity’s shareholding in a bank exceeds 6%, the entity must get permission before buying any more shares. The RBI’s approval is valid for one year from the date of its letter, expiring on Feb 4, 2025. HDFC Bank must ensure that its aggregate holding in the six banks does not exceed 9.5% of their paid-up share capital or voting rights at all times.
According to RBI norms on ownership of private banks, aggregate holding includes shareholding by the bank and entities. Although HDFC Bank does not intend to invest in these banks directly, an application was made to RBI due to the likelihood of the HDFC Bank group’s aggregate holding surpassing the prescribed limit of 5%.
The private lender and its affiliated entities, including HDFC Mutual Fund, HDFC Life Insurance, HDFC Ergo General Insurance, have been permitted to acquire an aggregate holding of up to 9.5% of the share capital or voting rights in the six banks.
These approvals stem from applications submitted by HDFC Bank, acting as a promoter/sponsor of the group, to RBI on Dec 18, 2023. RBI norms require that once any entity’s shareholding in a bank exceeds 6%, the entity must get permission before buying any more shares. The RBI’s approval is valid for one year from the date of its letter, expiring on Feb 4, 2025. HDFC Bank must ensure that its aggregate holding in the six banks does not exceed 9.5% of their paid-up share capital or voting rights at all times.
According to RBI norms on ownership of private banks, aggregate holding includes shareholding by the bank and entities. Although HDFC Bank does not intend to invest in these banks directly, an application was made to RBI due to the likelihood of the HDFC Bank group’s aggregate holding surpassing the prescribed limit of 5%.