LIC gets RBI approval to increase stake in IndusInd Bank

LIC had sought the approval as per the regulatory requirement  – The RBI norms mandate that every person or an entity who intends to make an acquisition in Private Banks of more than 5% stake, prior approval is needed from the Central Bank.

Key points to note –

  • LIC currently owns 4.95% in IndusInd.
  • Approval has been given by RBI to increase the same to 9.99%.
  • Approval is valid for one year.

Whether LIC will actually increase it’s stake in the bank is anybody’s guess.

Even if it decides to increase – timelines, extent of increase and the mechanism (primary or secondary) is unclear at this stage.

Recently, the Promoters (Hindujas) had also communicated their interest to increase stake in the bank.

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