The Reserve Bank of India on Thursday approved insurance behemoth Life Insurance Corporation of India’s (LIC) application to acquire up to 9.99 per cent aggregate holding of paid-up share capital in HDFC Bank, the country’s largest private sector bank.

The approval has been granted with reference to the application made by LIC to RBI, HDFC Bank said in a stock exchange filing.

LIC has been advised by RBI to acquire the major shareholding in HDFC Bank within a period of one year i.e. by January 24, 2025. Further, LIC must ensure that the aggregate holding in the Bank does not exceed 9.99% of the paid-up share capital or voting rights of the Bank at all times, RBI has said.

“Pursuant to Regulation 30 of the SEBI Listing Regulations, we would like to inform you that the Reserve Bank of India vide its letter dated January 25, 2024, addressed to LIC, has accorded its approval to LIC for acquiring aggregate holding up to 9.99 per cent of the paid-up share capital or voting rights of HDFC Bank,” the exchange filing said. 

The RBI approval is subject to the conditions including compliance with the relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies dated January 16, 2023 , provisions of the Foreign Exchange Management Act, 1999, provisions of the regulations issued by Securities and Exchange Board of India, and any other guidelines, regulations and statutes as applicable, the filing added. 

HDFC Bank shares had recently witnessed heavy sell off in the bourses pushing the shares to near 52-week lows, post the bank’s third quarter results.

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