RBI Approves SBI Funds Management To Acquire Up To 9.99 Per Cent Stake In HDFC Bank

However, SBI Fund Management has to ensure that the aggregate holding in the bank remains below 10 per cent of the paid-up share capital or voting rights of the HDFC Bank at all times

The approval has been granted with reference to the application made by SBIFML to RBI, HDFC Bank said in an exchange filing. ( Image Source :Getty )

The Reserve Bank of India (RBI) has given its approval to SBI Funds Management (SBIFML) to acquire up to a 9.99 per cent stake in HDFC Bank, the private sector lender said on Wednesday. The approval has been granted with reference to the application made by SBIFML to RBI, HDFC Bank said in an exchange filing.

"...we would like to inform you that the RBI vide its letter dated May 16, 2023, addressed to SBIFML, has accorded its approval to SBIFML for acquiring up to 9.99 per cent of the paid-up share capital or voting rights of HDFC Bank Limited," the bank said.

It further said SBIFML has been advised by RBI to acquire the major shareholding in the bank within a period of six months (by November 15, 2023).

SBIFML has to ensure that the aggregate holding in the bank remains below 10 per cent of the paid-up share capital or voting rights of the HDFC Bank at all times.

During a post-results analyst call, Chief Financial Officer Srinivasan Vaidyanathan announced that HDFC Bank and HDFC are currently in the process of merging and plan to complete the merger by July of this year, reported MoneyControl. 

Last April, the merger of HDFC Bank and Housing Development Finance Corporation (HDFC) was announced. The largest corporate merger in India's business history waiting for the final regulatory go-ahead. 

HDFC Ltd has received approval letters from various regulatory bodies, including the Reserve Bank of India, the Securities and Exchange Board of India (SEBI), the Pension Fund Regulatory and Development Authority (PFRDA), the Competition Commission of India, as well as India's stock exchanges BSE and the National Stock Exchange.

Additionally, the RBI has permitted HDFC Bank or HDFC Limited to increase their shareholding in HDFC Life Insurance and HDFC ERGO General Insurance to over 50 per cent prior to the merger.