HDFC Bank has received authorization from the Reserve Bank of India to acquire an aggregate holding of up to 9.95% in ICICI Bank and Kotak Mahindra Bank. This approval, effective as of May 6, 2026, covers the bank’s group entities including HDFC Mutual Fund and HDFC Life. While the bank does not intend to actively invest, the measure ensures compliance with group shareholding limits as these entities continue their normal course of business.
Understanding the Regulatory Approval
HDFC Bank announced that it has obtained formal approval to hold an aggregate stake of up to 9.95% in both ICICI Bank and Kotak Mahindra Bank. This development follows an application submitted by the bank on January 23, 2026, on behalf of its various group entities, including HDFC Securities, HDFC Pension Fund Management, and HDFC ERGO General Insurance. The approval provides the necessary regulatory headroom for these group entities to manage their holdings efficiently.
Validity and Operational Context
The approval granted by the regulatory authorities remains valid for a period of one year, expiring on May 5, 2027. The bank is strictly required to ensure that the aggregate shareholding across its group, which includes mutual funds and promoter group entities, does not exceed the 9.95% threshold of the paid-up share capital or voting rights in either institution at any given time.
Strategic Implications
While the bank maintains that it does not have an immediate intention to initiate new investments in these banks, the move is a proactive step to align with sector-wide norms regarding aggregate group holdings. The bank has clarified that all current and future holdings by its group entities are conducted in the normal course of business, supporting the ongoing operational activities of its diverse financial service subsidiaries.
Source: BSE
