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RBI has approved HDFC Bank for sale of 90% of stake in HDFC Credila

Published on February 26, 2024
Current Context: The Reserve Bank of India (RBI) has approved HDFC Bank’s sale of a 90% stake in HDFC Credila to ChrysCapital and BPEA EQT on 23rd February 2024.
RBI has approved HDFC Bank for sale of 90% of stake in HDFC Credila
  • This move is expected to boost HDFC Bank’s income in the fourth quarter.
  • The entire investment in HDFC Credila was transferred from HDFC Ltd, the parent housing finance company, to HDFC Bank when the two entities were amalgamated on July 1 of the previous year.
  • Bank analysts predict that HDFC Bank’s other income for the fourth quarter will reflect about Rs 9000 crore as earnings from selling its stake in HDFC Credila.
  • The housing finance company had agreed to sell its stake to private equity firm ChrysCapital and BPEA EQT.
  • As part of the transaction post-stake sale completion, the new investors have agreed to bring in a fresh equity infusion of Rs 2,000 crore to support growth in operations.
  • The balance Rs 1,300 crore would be made available on a need basis by the new promoter.
  • The Competition Commission of India (CCI) had approved the stake sale in June 2023.
  • As of the end of September 2023, HDFC Credila had assets under management of Rs 22636 crore, and its profit after tax stood at Rs 233 crore.

Question:

Q.1 Who approved HDFC Bank’s sale of a 90% stake in HDFC Credila?
a. The Competition Commission of India (CCI)
b. HDFC Ltd
c. The Reserve Bank of India (RBI)
d. ChrysCapital and BPEA EQT
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