The Reserve Bank of India (RBI) approved HDFC Bank Limited’s application to acquire an “aggregate holding” of up to 9.5 per cent of the paid-up share capital or voting rights in IndusInd Bank Limited, as per a regulatory filing by IndusInd Bank with the BSE. RBI’s approval is subject to compliance with 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 (as amended from time to time), provisions of the Foreign Exchange Management Act, 1999, regulations issued by the Securities and Exchange Board of India, and any other statutes, regulations, and guidelines, as applicable, the filing noted.

The headquarters of India’s HDFC Bank is pictured in Mumbai, India.(Reuters)

The central bank said that HDFC Bank needs to acquire major shareholding within one year from February 5, 2024. The approval will stand cancelled if HDFC fails to do the same.

HDFC Bank will need to ensure that its holding in IndusInd Bank does not exceed 9.50 per cent of the paid-up share capital or voting rights. If this falls below 5 per cent, approval of the RBI will be required to increase it to 5 per cent or more of the paid-up share capital or voting rights.

In January, RBI allowed Life Insurance Corporation of India (LIC) to acquire up to 9.99 per cent stake in HDFC Bank Ltd. HDFC Bank said, “LIC has been advised by RBI to acquire the aforesaid major shareholding in the Bank within one year i.e. by January 24, 2025. Further, LIC must ensure that the aggregate holding in the Bank does not exceed 9.99 per cent of the paid-up share capital or voting rights of the Bank at all times.”

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