RBI lets HDFC Bank buy up to 9.5% each in AU SFB. Kotak Mahindra and Capital Small Finance Bank

The Reserve Bank of India (RBI) has approved HDFC Bank’s proposal to acquire a 9.5 per cent stake in AU Small Finance Bank, Kotak Mahindra Bank and Capital Small Finance Bank. The approval is valid for a year from the date of issue of the RBI letter and will lapse if delayed beyond the deadline.

RBI, through its letter dated 3 January 2025, has authorised HDFC Bank and its group entities, such as HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, HDFC ERGO General Insurance, and HDFC Securities, to acquire up to 9.50 per cent paid-up capital or equivalent voting rights, as the case may be, of the three banks within a year from the date of approval, HDFC Bank ststed in an exchange filing.

All three acquisitions need to be completed within the one-year period, ie, latest by 2 January, to be valid, the filing added.

Aggregate holding includes shares held by the bank, its affiliates, mutual funds, trustees, and promoter group entities. The bank, along with its affiliates currently hold over 5 per cent equity stake in these banks and hence the need to seek RBI approval for the stake acquisition.