According to the rules of the central bank, it is mandatory for a person or an entity to take prior permission of the RBI if they intend to acquire a stake of more than 5 per cent in any private bank.
New Delhi: Life Insurance Corporation (LIC) has been granted approval by the Reserve Bank of India (RBI) to raise its stake in IndusInd Bank up to 9.99 per cent from the present 4.95 per cent. The approval is valid for a period of one year, till December 8, 2022, according to a report by Mint. This has come as the central government is planning to launch an initial public offering (IPO) of LIC.
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The report further stated that the approval is subject to compliance with the provisions of Securities Exchange Board of India (SEBI), provisions of the Foreign Exchange Management Act (FEMA), 1999, master direction on “Prior approval for the acquisition of shares or voting rights in private sector banks dated November 19, 2015, and the master direction on ‘Ownership in private sector banks’ dated May 12, 2016.
On Friday, the shares of IndusInd Bank opened at Rs 966 against the previous close of Rs 946.30, according to bseindia’s website.
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According to the rules of the central bank, it is mandatory for a person or an entity to take prior permission of the RBI if they intend to acquire a stake of more than 5 per cent in any private bank. The report also added that in this deal, LIC has to follow the directions of RBI given in 2015 and regulations of SEBI.
Prior to this, LIC had also received the approval to raise its stake in Kotak Mahindra Bank to up to 9.99 per cent.
