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regular-article-logo Thursday, 18 April 2024

HDFC gets RBI nod to buy 9.5 per cent stake each in six lenders, including ICICI, Axis Bank

The banking regulator gave its approval on February 5. Entities under HDFC Bank Group are HDFC Mutual Fund, HDFC Life Insurance Company, HDFC ERGO General Insurance Company and others

Our Special Correspondent Mumbai Published 07.02.24, 10:35 AM
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Representational image File picture

HDFC Bank on Tuesday said the Reserve Bank of India (RBI) has given its approval to the group to acquire up to 9.5 per cent stake each in six lenders, including ICICI Bank and Axis Bank.

The banking regulator gave its approval on February 5. Entities under HDFC Bank Group are HDFC Mutual Fund, HDFC Life Insurance Company, HDFC ERGO General Insurance Company and others.

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“The approvals were granted pursuant to applications made by HDFC Bank (as a promoter/ sponsor of the group) to RBI on December 18, 2023,” HDFC Bank said in a communication to stock exchanges. It added that the RBI’s approval is valid for a period of one year till February 4, 2025.

The six entities include Axis Bank, Suryoday Small Finance Bank, ICICI Bank, Bandhan Bank, Yes Bank, and IndusInd Bank.

According to RBI’s directions, HDFC Bank will have to ensure that the aggregate holding in the six banks does not exceed 9.50 per cent of the paid-up share capital or voting rights of the respective banks, at all times.

“In view of the same, whilst HDFC Bank does not intend to invest in these banks, since the aggregate holding of HDFC Bank Group, was likely to exceed the prescribed limit of 5 per cent, an application seeking approval of the RBI for increase in investment limits was made,” it said.

Further, since the RBI directions are applicable on HDFC Bank, the bank has made the application to the RBI on behalf of the group.

Shares of HDFC Bank on Tuesday ended at Rs 1,443.80, a drop of 0.09 per cent over the last close.

In a separate development, the bank announced expansion of its SME payment solutions with the launch of a business range of credit cards customised for business owners, entrepreneurs, and freelancers.

The credit cards will be available in four variants — BizFirst, BizGrow, BizPower, and BizBlack. HDFC Bank said the business credit card range will offer a best-in-class interest-free credit cycle of 55 days, savings on core business spends such as utility bills, GST, income tax, vendor payments, business travel, and business productivity tools.

It added that the offering is part of its strong suite of SME payments solutions which is designed to meet the diverse payment needs of self-employed individuals, SMEs and MSMEs.

SBICAP Ventures stake

State Bank of India on Tuesday announced that it has got the approval of the executive committee of its central board to acquire a 100 per cent stake held by SBI Capital Markets in SBICAP Ventures.

The lender said the cost of the acquisition is Rs 708 crore.

“The executive committee of the central board of the bank has accorded a final approval to acquire a 100 per cent stake held by SBI Capital Markets Ltd in SBICAP Ventures by State Bank of India,” the country’s largest lender said in a regulatory filing.

The bank said that SBICAP Ventures is engaged in the business of asset and investment management having assets under management (AUM) to the tune of Rs 33,055 crore as of December 2023.

The stake acquisition from SBI Capital Markets is for better governance, the lender said. The proposed transaction of acquisition is being done on an arm’s length basis.

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