The Reserve Bank of India (RBI) has allowed HDFC Bank to acquire up to a 9.5 per cent stake in Kotak Mahindra Bank, AU Small Finance Bank and Capital Small Finance Bank.
Banking circles said the purchase should be seen as an investment and nothing more should be read into it. This is not the first time that the HDFC Bank group is picking up stakes in other lenders.
In February last year, the HDFC Bank group said that it has received the central bank’s approval to acquire stakes in six banks which included Yes Bank, Axis Bank, ICICI Bank, Suryoday Small Finance Bank, Bandhan Bank and IndusInd Bank.
In a late evening regulatory filing on Friday, HDFC Bank said that the RBI has “given its approval to HDFC Bank Ltd (being promoter/sponsor of its group entities viz HDFC Mutual Fund, HDFC Life Insurance Company Ltd, HDFC ERGO General Insurance Company Ltd, HDFC Pension Fund Management Ltd and others) to acquire aggregate holding of up to 9.5 per cent of the share capital or voting rights’’ in the three banks.
HDFC Bank added that the approval is valid for a period of one year from the date of the RBI’s letter — till January 2, 2026. Moreover, it needs to ensure that the aggregate holding by its group entities in these banks does not exceed 9.5 per cent of the paid-up share capital or voting rights of the respective entities at all times.
“Whilst HDFC Bank does not intend to invest in these banks, since the aggregate holding of its group entities is likely to exceed the prescribed limit of 5 per cent, an application seeking approval of the RBI for increase in investment limits was made,” it added.
Loan growth
HDFC Bank on Saturday said it has registered a marginal 3 per cent increase in loan growth at ₹25.42 lakh crore in the December quarter.
Total advances were ₹24.69 lakh crore at the end of December 31, 2023.
The lender reported a 15.8 per cent rise in total deposits at ₹25.63 lakh crore against ₹22.14 lakh crore at the end of the third quarter of the previous financial year. The bank’s average advances under management were ₹26.27 lakh crore for the quarter under review.
With inputs from PTI
