RBI gives a nod to SBI Funds Management to acquire a stake in HDFC Bank

The Reserve Bank of India has given a nod to SBI Funds Management (SBIMFL) to buy up to 9.99% stake in HDFC Bank, the bank said in a notification to exchanges.

The approval has been given to the SBIFML application by RBI is subject to certain conditions, the HDFC Bank said.

RBI has advised SBIFML to acquire the stake in the bank within a period of six months i.e. by November 15, 2023, the bank said.

Further, SBIFML must ensure that the aggregate holding in HDFC Bank remains below 10% of the paid-up share capital or voting rights of the Bank at all times, the RBI has said.

In a post-results analyst call, after announcing the bank’s January-March 2023 quarterly results, Chief Financial Officer Srinivasan Vaidyanathan said that HDFC Bank and HDFC are getting merged by July this year.  

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

Further, The RBI has allowed HDFC Bank or HDFC Ltd to increase the shareholding in HDFC Life and HDFC ERGO to more than 50 percent.

The bank said the apex bank has allowed HDFC Bank or HDFC Ltd to increase the shareholding to more than 50% in HDFC Life Insurance and HDFC ERGO General Insurance prior to the effective date of the merger.