HDFC Bank must purchase a significant portion of the company within a year starting on February 5, 2024, according to the RBI, or the approval will be revoked. At all times, the HDFC Bank Group must make sure that its total holding stays below 9.50 percent.
As per IndusInd Bank’s regulatory filing with the BSE, the Reserve Bank of India (RBI) has granted HDFC Bank Limited permission to purchase a “aggregate holding” of up to 9.5% of the paid-up share capital or voting rights in IndusInd Bank Limited. This approval was given in a letter dated February 5, 2024. After HDFC Bank’s application was submitted to the RBI, approval was given.
The HDFC Group, not HDFC Bank, is the intended beneficiary of the stake acquisition in IndusInd Bank, HDFC Bank clarified to CNBC-TV18. The business stated that RBI approval was obtained for investments by its AMC and Insurance arms, and that the bank, in its capacity as the promoter, had to apply for permission from the RBI.
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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 Securities and Exchange Board of India (SEBI) regulations; 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, specified in the filing.
Conditions for IndusInd Bank share purchase approvals
RBI has stated that HDFC Bank must purchase a significant portion of the company within a year starting on February 5, 2024, or the approval will be revoked. HDFC Bank must make sure that, at all times, its ownership of IndusInd Bank does not surpass 9.50 percent of the bank’s paid-up share capital or voting rights. Additionally, prior clearance from the RBI will be needed to raise HDFC Bank’s “aggregate holding” to 5% or more of the paid-up share capital or voting rights if it falls below that threshold.