HDFC Group Gets RBI Nod For Acquiring 9.50% Stake In 5 Private Banks

The Reserve Bank of India (RBI) has given HDFC Bank, the country's largest private lender, permission to acquire a stake in three other private sector banks. The application of HDFC Bank Limited for the acquisition of an "aggregate holding" of up to 9.50% of Bandhan Bank Limited's paid-up share capital or voting rights was granted by the RBI on Tuesday.

RBI accepted the permission of HDFC Bank on February 6, to acquire aggregate holding of up to 9.50% of the paid-up share capital or voting rights of Yes Bank.

Regarding the acquisition, "The RBI has also conveyed that if the applicant fails to acquire major shareholding within one year from the date of this letter, this approval shall stand cancelled. The applicant has also been advised to ensure that their "aggregate holding" in the Bank does not exceed 9.50% of the paid-up share capital or voting rights of the Bank, at all times. If the "aggregate holding" falls below 5%, prior approval of the RBI will be required to increase it to 5% or more of the paid-up share capital or voting rights of the Bank," said Bandhan Bank in a stock exchange filing on Tuesday.

The RBI gave HDFC Bank Limited the go-ahead on Monday to acquire a "aggregate holding" of up to 9.50% of IndusInd Bank Limited's paid-up share capital or voting rights. In relation to the application that the bank submitted to the RBI, the aforementioned RBI permission has been given.

HDFC Bank Group has been granted RBI's nod to purchase up to 9.50 per cent of the equity stake in Yes Bank, Axis Bank, ICICI Bank, Suryoday Small Finance Bank, Bandhan Bank, and IndusInd Bank, thanks to approval from the Reserve Bank of India. The authorization is valid for a year, after which it expires if HDFC Bank is unable to purchase the stake.

"The RBI, while granting the above referred approval has also conveyed that if the Applicant fails to acquire major shareholding within a period of 1 (one) year from the date of aforesaid RBI letter, the approval shall stand cancelled. Further, the Applicant shall ensure that the "aggregate holding" in the Bank does not exceed 9.50% of the paid-up share capital or voting rights of the Bank at all times. 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 Yes Bank in a regulatory filing.

"Pursuant to an application filed by the applicant, RBI had sought comments from ICICI Bank for the proposed acquisition by any or all of the group companies of the applicant namely, HDFC Mutual Fund, HDFC Life Insurance Company Limited, HDFC Pension Management Company Limited and HDFC ERGO General Insurance Company Limited in any proportions such that their aggregate holding does not exceed 9.50% of the paid-up share capital of the Bank," said ICICI Bank in an exchange filing on Monday.