HDFC Bank Group Receives RBI Nod To Acquire 9.5% Share Each In 6 Banks

The group intends to acquire ‘an aggregate holding’ in the Axis Bank, Survoday Small Finance Bank, ICICI Bank, Bandhan Bank, YES Bank and IndusInd Bank

The group also noted that it doesn’t plan to invest in the banks, however, it was seeking approval for increasing the investment limits according to the RBI rules, as its holding was likely to bypass 5 per cent. 

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HDFC Bank Group announced on Tuesday that the firm received the Reserve Bank of India (RBI)’s nod to acquire a stake of about 9.5 per cent of the paid-up share capital or voting rights in six banks. The group intends to acquire ‘an aggregate holding’ in the Axis Bank, Survoday Small Finance Bank, ICICI Bank, Bandhan Bank, YES Bank and IndusInd Bank.

The group issued a regulatory filing and said, “The approvals were granted pursuant to applications made by HDFC Bank (as a promoter/sponsor of the Group) to RBI on December 18, 2023,” reported Business Standard. The company noted that the regulator’s approval remained valid for a period of one year from the date of RBI’s letter, till February 4, 2025 and it will ensure that the acquired stake doesn’t exceed 9.50 per cent, at all times.

The group also noted that it doesn’t plan to invest in the banks, however, it was seeking approval for increasing the investment limits according to the RBI rules, as its holding was likely to bypass 5 per cent. 

“Further, since the RBI Directions is applicable to HDFC Bank, the Bank had made the application to RBI on behalf of the Group,” the statement added. The HDFC Group comprises of HDFC Bank, HDFC Mutual Fund, HDFC Life Insurance Company Limited, and HDFC ERGO General Insurance Company Limited, among others. 

All the banks shared the announcement in separate regulatory filings and said, “The RBI, while granting the above-referred approval, has also conveyed that if the applicant fails to acquire major shareholding within a period of one year from the date of the aforesaid RBI letter, the approval shall stand cancelled.”

As of 1:38 PM, the shares of YES Bank were trading up by over 10 per cent at Rs 25.11 apiece on the BSE, while the ICICI Bank stood 0.45 per cent higher at Rs 1,028.40 per share. However, the other three listed banks in the list were trading in losses. Axis Bank stood 0.72 per cent lower and traded at Rs 1,054.85 apiece, while Bandhan Bank dipped over 2 per cent and was trading at Rs 218.05 per share. The IndusInd Bank remained 1.75 per cent down at Rs 1,512.50 apiece.