RBI approves HDFC Bank’s increase in its interest in six banks

MUMBAI: The RBI has given HDFC Bank permission to raise its ownership position in six banks: Yes Bank, Axis, ICICI, Suryoday Small Finance, Bandhan, and IndusInd.

The private lender is allowed to purchase up to 9.5% of the total share capital or voting rights in the six banks, along with its related companies HDFC Mutual Fund, HDFC Life Insurance, and HDFC Ergo General Insurance.
These approvals are the result of applications that HDFC Bank, the group’s promoter and sponsor, filed with the RBI on December 18, 2023. As per RBI regulations, an entity owning more than 6% of the shares of a bank is required to get clearance before purchasing further shares. The RBI’s permission expires on February 4, 2025, one year from the date on which it was sent. At all times, HDFC Bank must make sure that its total stake in the six banks does not above 9.5% of their fully paid-up share capital or voting rights.
The RBI’s guidelines on private bank ownership state that the bank and other entities’ shareholdings are included in the aggregate holding. An application was submitted to RBI because there is a possibility that the total holdings of the HDFC Bank group may exceed the 5% limit, even though HDFC Bank does not plan to actively engage in these institutions.