RBI Grants Approval: SBI Funds Management Authorized to Acquire 9.99% Stake in HDFC Bank

HDFC Bank announced through an exchange notification on May 17 that the Reserve Bank of India (RBI) has granted permission to SBI Funds Management (SBIMFL) to acquire a maximum of 9.99% of the paid-up share capital or voting rights of HDFC Bank. The approval was given in response to SBIFML’s application to the RBI, and HDFC Bank mentioned that the approval is subject to specific conditions.

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The bank stated that the RBI has instructed SBIFML to obtain the mentioned majority ownership in the bank by November 15, 2023. Additionally, the RBI has emphasized that SBIFML must maintain their total ownership in HDFC Bank below 10 percent of the paid-up share capital or voting rights of the bank at all times.

During a post-results analyst call following the announcement of HDFC Bank’s January-March 2023 quarterly results, Chief Financial Officer Srinivasan Vaidyanathan revealed that HDFC Bank and HDFC are currently undergoing a merger process, expected to be completed by July of this year.

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

Furthermore, HDFC Bank or HDFC Limited has received approval from the RBI to increase their ownership in HDFC Life Insurance and HDFC ERGO General Insurance to more than 50 percent. The bank has officially announced that the central bank has granted HDFC Bank or HDFC Ltd the authority to raise their shareholding in HDFC Life Insurance and HDFC ERGO General Insurance above 50 percent prior to the merger taking effect.