In a regulatory filing with the Bombay Stock Exchange (BSE), IndusInd Bank revealed that the Reserve Bank of India (RBI) has granted approval to HDFC Bank Group’s application to acquire an “aggregate holding” of up to 9.5 percent of the paid-up share capital or voting rights in IndusInd Bank Limited. The approval, dated February 5, 2024, follows the submission of an application by HDFC Bank Group to the RBI.
The regulatory filing outlines that RBI’s approval is contingent on adherence to the relevant provisions of the Banking Regulations 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, regulations issued by the Securities and Exchange Board of India, and other applicable statutes, regulations, and guidelines. The RBI has stipulated that HDFC Bank Group must acquire a significant shareholding within one year from February 5, 2024; otherwise, the approval will be nullified.
Additionally, HDFC Bank Group is required to ensure that its holding in IndusInd Bank does not exceed 9.50 percent of the paid-up share capital or voting rights of the Bank at any given time. If the aggregate holding falls below 5 percent, prior approval from the RBI is mandatory to increase it to 5 percent or more of the paid-up share capital or voting rights.
In a related development on January 25, the RBI permitted Life Insurance Corporation of India (LIC) to acquire up to a 9.99 percent stake in HDFC Bank Ltd. HDFC Bank clarified to CNBC-Awaaz that the RBI approval is not specific to HDFC Bank as a standalone entity; instead, the term “Bank” in the disclosure should be interpreted as referring to the HDFC Bank Group. LIC has been advised by the RBI to acquire the major shareholding within one year, by January 24, 2025, ensuring that the aggregate holding does not exceed 9.99 percent of the paid-up share capital or voting rights of the Bank.
