HDFC Bank Group has received approval from the Reserve Bank of India (RBI) to acquire up to 9.5% stake in six lenders, including ICICI Bank and Axis Bank. The approval was granted on February 5, 2024, and is valid for a period of one year until February 4, 2025.
The entities under the HDFC Bank Group include HDFC Mutual Fund, HDFC Life Insurance Company, HDFC ERGO General Insurance Company, and others. The group had applied to the RBI on December 18, 2023, as a promoter/sponsor of the group.
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The six lenders in which HDFC Bank will acquire stakes are Axis Bank, Suryoday Small Finance Bank, ICICI Bank, Bandhan Bank, Yes Bank, and IndusInd Bank. However, HDFC Bank will have to ensure that its aggregate holding in these banks does not exceed 9.5% of the paid-up share capital or voting rights of the respective banks at all times, as per RBI directions.
HDFC Bank clarified that it does not intend to invest in these banks directly, but because the aggregate holding of HDFC Bank Group was likely to exceed the prescribed limit of 5%, it had to seek approval from the RBI to increase the investment limits. The application was made on behalf of the group by HDFC Bank, as it is the entity to which the RBI directions are applicable.
The RBI also mandates that the HDFC Bank Group acquire a major shareholding within one year in all the banks from the date of the approval, failing which the approval would stand cancelled.
This move by HDFC Bank Group to acquire stakes in these lenders can be seen as a strategic investment to strengthen its position in the banking sector. It allows the group to have a presence and influence in multiple banks, potentially diversifying its portfolio and increasing its overall market share.
Overall, with the RBI’s approval, HDFC Bank Group can proceed with acquiring up to 9.5% stake in Yes Bank, Axis Bank, and four other lenders. This move could have a significant impact on the banking landscape in the country, and it will be interesting to see how HDFC Bank Group leverages these investments to further its growth and expansion in the future.
About HDFC Bank Group:
- HDFC Bank Group is a leading financial services group in India, comprising various companies offering a wide range of financial products and services.
- HDFC Bank, established in 1994, is India’s largest private sector bank, providing personal banking, corporate banking, investment banking, and treasury services.
- The group has a large network of branches and ATMs across India.
- Key subsidiaries and associates of HDFC Bank Group include HDFC Limited (India’s leading housing finance company), HDFC Life (one of India’s leading life insurance companies), HDFC Ergo General Insurance (a leading general insurance company), HDFC Asset Management (a leading asset management company), HDFC Securities (a leading stockbroking and investment advisory firm), and HDFC Venture Capital (a leading venture capital firm).
- The group has a strong brand reputation and offers diversified products and services.
- HDFC Bank Group has a large and loyal customer base.
- The group’s financial performance is strong.
- In April 2022, HDFC Bank merged with HDFC Limited, creating a financial services giant.
- The group is expanding its digital offerings and increasing its presence in rural areas.
- Overall, HDFC Bank Group is a major player in the Indian financial services industry and is well-positioned for future growth.
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Last Updated on 7 months
