The Reserve Bank of India (RBI) has given HDFC Bank Group permission to purchase a "aggregate holding" of up to 9.5% of the paid-up share capital or voting rights in six banks, the bank group said on Tuesday. Axis Bank, Survoday Small Finance Bank, ICICI Bank, Bandhan Bank, YES Bank, and IndusInd Bank are a few of these banks. The Bank stated in a regulatory filing that "the approvals were granted pursuant to applications made by HDFC Bank (as a promoter/sponsor of the Group) to RBI on December 18, 2023."
It further stated, "The RBI's approval is good until February 4, 2025, one year from the date of the RBI's letter. Furthermore, HDFC Bank will always make sure that the "aggregate holding" in the aforementioned institutions does not exceed 9.50 percent of the respective banks' paid-up share capital or voting rights."
Although the HDFC Bank filed an application to raise the investment restrictions, it stated that it does not plan to invest in these banks because the holding is expected to exceed five percent as per RBI regulations.
"Further, since the RBI Directions is applicable to HDFC Bank, the Bank had made the application to RBI on behalf of the Group," it stated. Among the companies that make up the HDFC Group are HDFC Bank, HDFC Mutual Fund, HDFC ERGO General Insurance Company Limited, HDFC Life Insurance Company Limited, and others. Nearly all of the banks likewise made the news in their own regulatory filings.
According to their papers, "The RBI, while granting the above-referred approval, has also conveyed that if the applicant fails to acquire major shareholding within a period of one year from the date of the aforesaid RBI letter, the approval shall stand cancelled." YES Bank was up 9.69% and trading at Rs 25.01 per share on the BSE as of 10:45 am. With a 0.3% gain, ICICI Bank was trading at Rs 1,027.05 per share.
The remaining three banks on the list, nevertheless, were trading negatively. At Rs 1,053.8 per share, Axis Bank was down 0.82 percent. With a roughly 1% decline, Bandhan Bank was trading at Rs 220.7 per share. IndusInd Bank's share price dropped by more than 1.5% to Rs 1,515.55.
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