The HDFC Bank Group’s proposal to purchase a “aggregate holding” of up to 9.50 percent in six banks—Axis Bank, Bandhan Bank, ICICI Bank, IndusInd Bank, Suryoday Small Finance Bank, and Yes Bank—was approved by the Reserve Bank of India (RBI) on February 5.
RBI Approvals and Restrictions for HDFC Bank and Group Companies
Following applications submitted to RBI on December 18, 2023 by HDFC Bank (functioning as the Group’s promoter/sponsor), the approvals were granted. The RBI’s approval is good until February 4, 2025, one year from the date of the RBI’s letter.
At all times, HDFC Bank must make sure that the “aggregate holding” in the aforementioned banks does not exceed 9.50 percent of the respective banks’ paid-up share capital or voting rights.
The HDFC Bank Limited, along with its group companies HDFC Mutual Fund, HDFC Life Insurance Company Limited, HDFC ERGO General Insurance Company Limited, and others, are the recipients of the approvals.
The filing stated that the RBI’s approval is contingent upon adherence to the following: the Foreign Exchange Management Act of 1999; the Banking Regulation Act of 1949; the RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies, dated January 16, 2023 (as amended); and other relevant statutes, regulations, and guidelines.
Stock Market Fluctuations
The shares of IndusInd Bank and HDFC Bank are trading flat in the early morning session, despite the RBI having approved the HDFC Bank Group’s plans to purchase an aggregate holding of up to 9.50 percent in the IndusInd Bank.
The price of IndusInd shares opened higher today and reached an intraday high of ₹1548.90 per share on the BSE, indicating a slight increase from Monday’s closing price of ₹1539.25 per share on the BSE. HDFC Bank’s share price, however, is down after hitting an intraday low of ₹1438.85 on the BSE.