SBI Funds Management Authorized to Acquire up to 9.99% Stake in HDFC Bank, Confirms RBI
SBI Funds Management Authorized to Acquire up to 9.99% Stake in HDFC Bank, Confirms RBI
Blog Article
According to a regulatory filing made by the lender on Wednesday, the Reserve Bank of India (RBI) has authorised the application by asset management firm SBI Funds Management Ltd. (SBIIFML) to purchase up to 9.99% of HDFC Bank. The asset management business (AMC) now owns 5.07% of HDFC Bank and 3.79% of mortgage lender Housing Development Finance Corp. (HDFC) in equity terms. According to a person with knowledge of the situation, the AMC would have required prior clearance to hold a share up to a specific amount that would be exceeded following the merger of HDFC and HDFC Bank. It would be ensured that it meets RBI standards on ownership in banks by receiving clearance to increase to 9.99%.
RBI Authorizes SBI Funds Management to Cross 5% Ownership Limit in HDFC Bank
The latest business news in India today shows that promoter HDFC will join India's largest private-sector lender, it was announced in April 2022. In accordance with the merger agreement, owners of mortgage lenders would get 42 HDFC Bank equity shares for every 25 shares they now own. Anyone planning to buy shares of a bank that might result in significant ownership is required by the RBI to obtain prior clearance from the regulator. The term "major shareholding" refers to the collective ownership of 5% or more of a bank's paid-up share capital or voting rights. The regulator has instructed SBI Funds to purchase bank shares by November 15th.
The Reserve Bank of India permitted SBIFML to purchase up to 9.99% of the paid-up share capital or voting rights of HDFC Bank Ltd. In a letter dated May 16, 2023, that was sent to SBI Funds Management Ltd., the bank notified the exchanges. In addition to today's top business news headlines, the bank stated in the regulatory filing that SBI Funds must make sure that the total stake in the bank stays below 10% of the paid-up share limit.
Nevertheless, the RBI's approval is subject to several requirements, including adherence to the Banking Regulation Act, the Foreign Exchange Management Act, Sebi regulations, the RBI's master direction and guidelines on the acquisition and holding of shares or voting rights in banks published on January 16, and other conditions. Report this page