RBI nod for HDFC Bank Group plans to acquire 9.50% ‘aggregate hold’ in IndusInd

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The Reserve Bank of India (RBI) has approved HDFC Bank’s proposal to acquire “aggregate holding” of up to 9.50 percent in the paid-up share capital or voting rights of IndusInd Bank, the latter informed the exchanges.

The approval, granted through an RBI letter dated February 5, 2024, is based on HDFC Bank’s application to the central bank.

To clarify the details, HDFC Bank told CNBC-TV18 that the stake acquisition in IndusInd Bank is not intended for HDFC Bank, but for HDFC Group. Adding that the bank, acting as the promoter had to seek approval from the RBI, the company said RBI’s approval for acquiring a stake in IndusInd Bank is for investments by its AMC and Insurance arms.

The RBI approval is subject to compliance with 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 (as amended), provisions of the Foreign Exchange Management Act, 1999, regulations by the Securities and Exchange Board of India (SEBI), and other applicable statutes, regulations, and guidelines, the filing noted.

Conditions for Approval

The RBI has stipulated that if HDFC Bank fails to acquire a major shareholding within one year from the date of the RBI letter, the approval will be cancelled.

Additionally, HDFC Bank must ensure that the “aggregate holding” in IndusInd Bank does not exceed 9.50 percent of the paid-up share capital or voting rights at any time. Should the “aggregate holding” fall below 5 percent, prior approval from the RBI will be necessary to increase it to 5 percent or more of the paid-up share capital or voting rights of IndusInd Bank.

IndusInd Bank Q3 Results

IndusInd Bank announced its October-December quarter results for fiscal 2023-24 (Q3FY24), reporting a rise of 17.3 per cent in standalone net profit at 2,297.8 crore, compared to 1,959.2 crore in the year-ago period. For the nine months ended December 31, 2023, the leading private lender’s net profit stood at 6,628 crore, compared to 5,400 crore in the corresponding period last year.

The private lender reported robust earnings in the December quarter, driven by strong loan growth and stable asset quality. At 3,27,057 crore, the bank registered a loan growth of 20 per cent year-on-year (YoY), while deposits grew 13 per cent annually.

“Indian economy continues to show robust momentum delivering real GDP growth of 7.6 per cent in Q2. The regulatory and fiscal policies have been effectively mitigating geo-political uncertainties in the global economy,” said Sumant Kathpalia, Managing Director & CEO, IndusInd Bank.

“IndusInd Bank too continues to participate in the healthy economic outlook. The bank’s loan book grew by 20 per cent YoY driven by a robust retail segment growing 24 per cent YoY…The bank remains on track in executing its strategy of delivering growth, granularity and governance,” added Kathpalia.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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