RBI allows SBI Funds Management to acquire up to 9.99% stake in HDFC Bank

The Reserve Bank of India has allowed SBI Funds Management (SBIMFL) to acquire up to 9.99 percent of the paid-up share capital or voting rights of HDFC Bank, the bank said in a notification to exchanges on May 17.

The approval has been granted with reference to the application made by SBIFML to RBI, the HDFC Bank said, adding that the approval granted by RBI is subject to certain conditions.

SBIFML has been advised by RBI to acquire the aforesaid major shareholding in the bank within a period of six months i.e. by November 15, 2023, the bank said.

Further, SBIFML must ensure that the aggregate holding in HDFC Bank remains below 10 percent of the paid-up share capital or voting rights of the Bank at all times, the RBI has said.

HDFC Bank and HDFC is in the process of getting merged by July this year, Chief Financial Officer Srinivasan Vaidyanathan said after announcing the bank’s January-March 2023 quarterly results, in a post-results analyst call.

HDFC Ltd had received approval letters including from Reserve Bank of India, Securities and Exchange Board of India (SEBI) Pension Fund Regulatory and Development Authority (PFRDA) and Competition Commission of India as well as from India’s stock exchanges BSE and the National Stock Exchange.

Further, The RBI has allowed HDFC Bank or HDFC Limited to increase the shareholding in HDFC Life and HDFC ERGO to more than 50 percent.

The bank said the apex bank has allowed HDFC Bank or HDFC Ltd to increase the shareholding to more than 50 percent in HDFC Life Insurance and HDFC ERGO General Insurance prior to the effective date of the merger.

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