RBI has given its approval to HDFC Bank group to acquire “aggregate holding” of up to 9.50 per cent of the share capital or voting rights in Kotak Mahindra Bank, AU Small Finance Bank and Capital Small Finance Bank.

HDFC Bank, in a regulatory filing, said the banking regulator’s approval is valid for one year from the date of RBI’s letter – till January 2, 2026.

Further HDFC Bank needs to ensure that the “aggregate holding” by its group entities (HDFC Mutual Fund, HDFC Life Insurance Company, HDFC ERGO General Insurance Company, HDFC Pension Fund Management and others) in the above mentioned banks does not exceed 9.50% of the paid-up share capital or voting rights of the respective banks, at all times.

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HDFC bank said as per the Reserve Bank of India (Acquisition and Holding of Shares or Voting Rights in Banking Companies) Directions, 2023 (“RBI Directions”), ‘aggregate holding’ includes shareholding by the Bank, entities under the same management/ control, mutual funds, trustees, promoter group entities, etc.

In view of the same, whilst HDFC Bank does not intend to invest in these banks, since the “aggregate holding” of HDFC Bank group entities is likely to exceed the prescribed limit of 5%, an application seeking approval of RBI for increase in investment limits was made, per the regulatory filing.

Further, since the RBI Directions is applicable to HDFC Bank, the Bank had made the application to RBI on behalf of the Group, on September 20, 2024.