The Reserve Bank of India (RBI) has granted approval to HDFC Bank to acquire an "aggregate holding" of up to 9.50 percent of the paid-up share capital or voting rights" in IndusInd Bank, according to the company's exchange filing.
The approval comes after HDFC Bank submitted an application to the regulator. The validity of the approval is for one year, and if HDFC Bank fails to complete the acquisition within this timeframe, the approval will be revoked.
"The Reserve Bank of India, vide its letter dated February 5, 2024 has accorded its approval to HDFC Bank Limited for acquiring “aggregate holding” of up to 9.50 per cent of the paid-up share capital or voting rights in IndusInd Bank. The aforesaid RBI approval has been granted with reference to the application made by the applicant to the RBI," said IndusInd bank in an exchange filing.
The RBI's approval is contingent upon compliance with various regulatory frameworks, including the Banking Regulation Act, 1949, RBI's Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies (dated January 16, 2023), FEMA, Sebi regulations, and other relevant regulations.
HDFC Bank must also ensure that its "aggregate holding" in IndusInd Bank does not surpass 9.50 per cent of the paid-up share capital or voting rights at any given time. Additionally, if the "aggregate holding" falls below 5 per cent, prior approval from the RBI will be required to increase it to 5 per cent or more of the paid-up share capital or voting rights of IndusInd Bank
