HDFC Bank, group companies get RBI nod to acquire up to 9.5% stake in six banks

HDFC Bank and its group companies have received RBI approval to acquire stake in ICICI Bank, Axis Bank, IndusInd Bank, YES Bank, Bandhan Bank and Suryoday SFB

HDFC Bank, including group companies HDFC Mutual Fund, HDFC Life Insurance and HDFC ERGO General Insurance, have received the Reserve Bank of India’s approval to acquire an aggregate stake of up to 9.5 per cent in six banks.

The six banks are ICICI Bank, Axis Bank, IndusInd Bank, YES Bank, Bandhan Bank and the only small finance bank Suryoday SFB, the lender notified the exchanges.

The regulatory nod was received on January 5, 2024, following applications made by the bank as a promoter or sponsor of the group on December 18, 2023. The approval is valid for one year, till February 4, 2025.

“Whilst HDFC Bank does not intend to invest in these banks, since the ‘aggregate holding’ of HDFC Bank group was likely to exceed the prescribed limit of 5 per cent, an application seeking RBI approval for an increase in investment limits was made,” the notice said, adding that these investments are “normal course of business of the respective group entities”.

According to the central bank’s guidelines, ‘aggregate holding’ includes shareholding by the bank, entities under the same management/ control, mutual funds, trustees and promoter group entities, among others.

“HDFC Bank shall ensure that the ‘aggregate holding’ in the above‐mentioned banks does not exceed 9.5 per cent of the paid‐up share capital or voting rights of the respective banks at all times,” it said.

As of December 2023, HDFC Mutual Fund held 2.76 per cent voting right in ICICI Bank, 2.49 per cent in Axis Bank, and 2.23 per cent in IndusInd Bank. HDFC Life Insurance held 2.92 per cent stake in Suryoday SFB, whereas HDFC Pension Management had 1.88 per cent stake in IndusInd Bank. HDFC Bank held 3 per cent stake in YES Bank as of December 31.

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