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LIC gets RBI's nod to increase stake in Kotak Mahindra Bank to 9.99%

According to the central bank norms, prior approval of the RBI is required to increase stake in private banks beyond 5%

Topics
LIC  | Kotak Mahindra Bank | RBI

Subrata Panda  |  Mumbai 

Coming soon: LIC kicks off work on IPO allotment to policyholders
Life Insurance Corporation

The Reserve Bank of India (RBI) has granted approval to state-owned insurance behemoth Life Insurance Corporation (LIC) of India to raise its stake in private lender up to 9.99 per cent.

Currently, the life insurer holds 4.96 per cent in the private lender. In a notification to exchanges, the lender said, “…has received an intimation from stating that the Reserve Bank of India (RBI) had granted its approval to LIC, for increasing its holding in the bank up to 9.99 per cent of the paid-up equity share capital of the bank...”.

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Shares of closed with gains of 2.92 per cent on the BSE after the announcement —the most among Sensex components. The approval of the central bank will be valid for one year.

According to the central bank norms, prior approval of the is required to increase stake in private beyond 5 per cent.

is one of the biggest institutional investors in India’s stock market and has a stake in a number of private and public sector has a stake in as many as 24 scheduled commercial banks, shows the data from Capitaline. It holds 49.24 per cent stake in IDBI Bank.

Once LIC raises its shareholding in Kotak Mahindra Bank to 9.99 per cent, it will be the second-largest shareholding of the insurer in a scheduled commercial bank. Among other major banks, LIC holds 8.8 per cent in Canara Bank, 8.3 per cent in Punjab National Bank and State Bank of India, 8.2 per cent in Axis Bank, and 7.6 per cent in ICICI Bank.

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Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd

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First Published: Mon, November 29 2021. 14:32 IST
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