Federal Bank Ltd, RBL Bank Shares Up 2% After ICICI Pru AMC Gets RBI Approval To Acquire 9.95% Stake

Shares of two banking stocks Federal Bank Ltd and RBL Bank Ltd traded in the green on Friday (December 29) after the Reserve Bank of India (RBI) gave a go-ahead to ICICI Prudential Asset Management Company Ltd. (ICICI AMC) to acquire aggregate holding of up to 9.95% of the paid-up share capital or voting rights of the two lenders. Today, Federal Bank shares were seen trading 1.61% higher at Rs 157.95 per share at 9:22 am IST. The share price of RBL Bank Ltd was up 1.84% at Rs 273.90 per share at 9:23 am IST.

In an exchange filing on December 28, the Jhunjhunwala-backed Federal Banks said, "The Federal Bank Ltd ("Bank") has received an intimation from the Reserve Bank of India ("RBI") on December 28, 2023, that it has accorded its approval to ICICI Prudential Asset Management Company Ltd. (ICICI AMC) for acquiring aggregate holding of up to 9.95% of the paidup Share Capital or Voting Rights of the Bank subject to the conditions specified therein."

According to the lender, the aforesaid approval granted by RBI is subject to 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 (as amended from time to time), provisions of the Foreign Exchange Management Act, 1999, regulations issued by Securities and Exchange Board of India, and any other guidelines, regulations and statutes as applicable.

This news was also confirmed by the RBL Bank in an exchange filing on Thursday. The bank said that RBI has accorded its approval to ICICI Prudential Asset Management Company Limited (I-Pru AMC) and ICICI Prudential Life Insurance Company Limited ("I-Pru Life"), to acquire "aggregate holding" of up to 9.95% of the paid-up share capital or voting rights in RBL Bank Limited.

"As per the RBI Letter, I-Pru AMC and I-Pru Life have been accorded the approval to acquire the aforesaid major shareholding in the Bank within a period of one year i.e. by December 26, 2024, and to ensure that the aggregate holding in the Bank does not exceed 9.95% of the paid-up share capital or voting rights of the Bank at all times. Further in the event, if the aggregate holding falls below 5%, prior approval of RBI will be required to increase it to 5% or more of the paid-up share capital or voting rights of the Bank," said RBI in an exchange filing on Thursday.

According to the lender, the ICICI group (including ICICI Prudential Life Insurance Co. Ltd and ICICI Prudential Asset Management Company Limited) held 2.08% of the equity share capital of the Bank as of December 22, 2023.