RBI allows SBI Group entities to raise ICICI Bank stake to 9.99%
The Reserve Bank of India (RBI) has allowed SBI Funds Management together with all other group entities of the SBI Group to acquire up to a 9.99% stake in ICICI Bank.
In a notification to the stock exchanges, ICICI Bank said that in a letter to SBI Funds Management, the RBI has told the company to ensure that the total shareholding of the SBI Group entities in ICICI Bank remains below 10% of the paid up equity capital of the bank at all times. The approval is valid for a period of one year, that is, up to March 22, 2023.
“This approval is subject to compliance with the relevant provisions of Banking Regulation Act, 1949, Master Direction on ‘Prior Approval for Acquisition of Shares or Voting Rights in Private Sector Banks’ dated November 19, 2015 and Master Direction on ‘Ownership in Private Sector Banks’ dated May 12, 2016 issued by RBI, provisions of the regulations issued by Securities and Exchange Board of India, provisions of the Foreign Exchange Management Act, 1999 and any other guidelines, regulations and statutes as applicable,” the notification said.
Mutual funds currently hold a 28.2% stake in ICICI Bank and SBI Mutual Fund has a 5.72% stake.
RBI norms state that any entity who intends to acquire a 5% or higher stake in a private bank shall have to seek prior approval of the central bank.