crossorigin="anonymous"> HDFC Bank gets RBI nod to increase group stake in 3 banks – Times of India – Subrang Safar: Your Journey Through Colors, Fashion, and Lifestyle

HDFC Bank gets RBI nod to increase group stake in 3 banks – Times of India


Mumbai: HDFC Bank has informed the stock exchange that it has received approval from the RBI to raise investment in its group entities. Kotak Mahindra Bank, AU Small Finance Bankand Capital Small Finance Bank up to 9.5% of their share capital.
The RBI, through a letter dated January 3, approved HDFC Bank as promoter and sponsor of its group entities, including HDFC Mutual Fund, HDFC Life InsuranceHDFC ERGO General Insurance, and HDFC Pension Fund Management, among others.
HDFC Bank clarified that while it does not intend to invest directly in these banks, its “aggregate holding” of group entities is likely to exceed the prescribed 5% limit. This forced the bank to apply to the RBI on September 20, 2024, so that Investment limits. The bank said the investment was part of the regular course of business of its group entities.
HDFC Mutual Fund, with assets under management of Rs 7.7 lakh crore, and HDFC Life Insurance, with around Rs 3 lakh crore under management, have significant investment portfolios. HDFC Bank has the largest investment book within the group, consisting mainly of government bonds, with a non-SLR book amounting to Rs 1.7 lakh crore. HDFC Pension Fund recently crossed Rs 1 lakh crore in AUM.
Investors in banks must seek prior approval from the RBI before increasing their stake beyond the 5% threshold, unlike other listed companies where disclosures are triggered after crossing certain thresholds. SEBI regulations mandate investors holding more than 5% of a company’s shares or voting rights to disclose their holdings within two working days. Further disclosures are required if the share rises or falls by 2% or more.
The approval, valid until January 2, 2026, is subject to certain conditions. HDFC Bank must ensure that the “aggregate holding” of its group entities in these banks does not exceed 9.5% of their paid-up share capital or voting rights at any time. “Total holding” includes shareholding by a bank, entities under the same management or control, and holdings of mutual funds, trustees, and promoter group entities, as per RBI’s 2023 Guidelines on Acquisition of Banking Shares. has been described.



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