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RBI approved HDFC Bank group to acquire up to 9.5 pc in 6 banks

Published on February 07, 2024
Current Context: The Reserve Bank of India (RBI) has approved the HDFC Bank group to acquire an “aggregate holding” of up to 9.5% of the paid-up share capital or voting rights in six banks.
RBI approved HDFC Bank group to acquire up to 9.5 pc in 6 banks
  • These banks are:
    • Axis Bank
    • Suryoday Small Finance Bank
    • ICICI Bank
    • Bandhan Bank
    • YES Bank
    • IndusInd Bank
  • The term “aggregate holding” includes shareholding by the bank and entities under the same management/control, mutual funds, trustees, and promoter group entities.
  • The approval was granted following applications made by HDFC Bank to the RBI on December 18, 2023.
  • The RBI’s approval is valid for a period of one year from the date of the RBI’s letter, which is until February 4, 2025.
  • HDFC Bank must ensure that the “aggregate holding” in these six banks does not exceed 9.50% of the paid‐up share capital or voting rights of the respective banks, at all times.
  • While HDFC Bank does not intend to invest in these banks, since the “aggregate holding” of HDFC Bank group was likely to exceed the prescribed limit of 5%, an application seeking approval of the RBI for increase in investment limits was made.

Question:

Q.1 What is the maximum percentage of the paid-up share capital or voting rights that HDFC Bank can acquire in the six banks?
a. 5%
b. 9.5%
c. 10%
d. 15%

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