The Reserve Bank of India (RBI) has approved financial services conglomerate HDFC Group acquiring up to 9.5% equity stake in leading private lenders ICICI Bank, Axis Bank, Yes Bank, Bandhan Bank, IndusInd Bank and Suryoday SFB. The nod granted on February 5th remains valid for one year till February 2025.
HDFC Group entities covered under the aggregate holding ceiling include HDFC Mutual Fund, HDFC Life and HDFC ERGO General Insurance besides other associates of promoter HDFC Bank. The group threshold aims preventing disproportionate influence across banking channels.
Seeks Compliance Amidst Rising Associate Ownership
According to HDFC Bank, consolidated shareholding was expected to breach the standard 5% triggers mandated for regulatory oversight as associate entity investments kept rising steadily in contemporaries. Hence RBI direction became pertinent to comply with for HDFC promoter bank itself.
However, HDFC Bank clarified that neither the lender nor key arms aim to deploy more capital towards the 6 shortlisted private banks at this stage. The move broadly intends compliance in light of organically expanding portfolio holding percentages seen recently to honor set fairness thresholds.
