RBI Approves HDFC Bank’s Acquisition Of 9.5% Stakes in AU Small Finance Bank; Details Here

Last Updated: January 04, 2025, 12:17 IST

The authorization stands for a year from January 3, 2025, after which it will certainly gap if the procurement is not settled.

The Reserve Bank of India (RBI) has actually provided HDFC Bank, India’s biggest exclusive loan provider, authorization to obtain approximately a 9.5% risk in AU Small Finance Bank (AU SFB). The authorization stands for a year from January 3, 2025, after which it will certainly gap if the procurement is not settled.

In a regulative declaring, AU SFB revealed that the RBI’s authorization includes HDFC Bank and its team firms, consisting of HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, HDFC ERGO General Insurance, and HDFCSecurities Together, these entities are allowed to jointly stand up to 9.5% of AU SFB’s paid-up share resources or ballot legal rights.

HDFC Bank likewise revealed that it has actually obtained the RBI’s nod to obtain approximately a 9.5% risk in Kotak Mahindra Bank andCapital Small Finance Bank This authorization stays legitimate up until January 2, 2026.

However, the RBI has actually mandated that the overall possession by HDFC Bank and its team entities throughout these establishments need to not go beyond the 9.5% limit. According to the RBI Directions 2023, “accumulated holding” includes shares owned by the bank, its subsidiaries, mutual funds, trustees, and promoter group entities.

Although HDFC Bank does not plan to directly invest in these banks, its group companies’ collective shareholding could surpass the 5% cap, necessitating regulatory clearance. To accommodate this, HDFC Bank sought approval to increase its investment limit.

On January 3, HDFC Bank’s shares decreased 2.5% to shut at Rs 1,749, amidst a broad-based market selloff. Trading quantities rose as roughly 1 crore shares were traded, surpassing the one-month and one-week standards of 94 lakh shares, according to Moneycontrol.