New Delhi: The Reserve Bank of India (RBI) has approved HDFC Bank’s proposal to acquire up to 9.5% stake in private sector lender IndusInd Bank, according to a regulatory filing made by IndusInd Bank on Tuesday.
The approval, granted through an RBI letter dated December 15, allows HDFC Bank to acquire an “aggregate holding” of up to 9.5% of the paid-up share capital or voting rights of IndusInd Bank.
The approval is subject to compliance with provisions under the Banking Regulation Act, RBI’s shareholding directions for commercial banks, SEBI regulations, FEMA, and other applicable laws.
RBI has stipulated that the proposed acquisition must be completed within one year from the date of approval, failing which the permission will stand cancelled.
The central bank has also imposed a cap, stating that HDFC Bank’s aggregate holding should not exceed 9.5% at any point in time.
Further, if HDFC Bank’s holding falls below 5%, it will require prior RBI approval to raise its stake back to 5% or more.
The regulator has also clarified that HDFC Bank will not be entitled to any representation on IndusInd Bank’s board despite the proposed shareholding.
IndusInd Bank said the disclosure has been made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and has also been published on the bank’s website.