SBI Funds Management gets RBI's nod to acquire 9.99% stake in HDFC Bank

State Bank of India (SBI) Funds Management on Wednesday received the approval of the Reserve Bank of India (RBI) to acquire up to 9.99 per cent stake in HDFC Bank.

HDFC Bank in an exchange filing said, "RBI vide its letter dated May 16, 2023, addressed to SBI Funds Management Limited, has accorded its approval to SBIFML for acquiring up to 9.99 per cent of the paid-up share capital or voting rights of HDFC Bank Limited (“the Bank”). The approval has been granted with reference to the application made by SBIFML to RBI."

The lender in the filing also stated that SBI Funds Management has been advised by the central bank to complete the said stake acquisition in the bank within a period of six months i.e. by November 15, 2023. Further, SBI Funds Management must ensure that the aggregate holding in the Bank remains below 10 per cent of the paid-up share capital or voting rights of the bank at all times, it added.

RBI's approval that has been granted to SBI Funds Management is subject to the conditions, including compliance with the relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies dated January 16, 2023, provisions of the Foreign Exchange Management Act, 1999, provisions of the regulations issued by the Securities and Exchange Board of India (Sebi), and any other guidelines, regulations, and statutes as applicable.

According to media reports, HDFC Bank is in the process of getting merged with HDFC, and the merger is expected to be complete by the end of the June quarter.