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The Reserve Bank of India (RBI) has approved SBI Mutual Fund, along with other SBI group companies, to hold a 9.99% stake in ICICI Bank – the country’s second largest lender.
“(ICICI) Bank has today received a copy of RBI letter dated March 23, 2022 addressed to SBIFML [SBI Mutual Fund] that it has accorded its approval to SBIFML together with all other group entities of SBI group for acquiring upto 9.99% of the paid-up equity capital of the Bank,” ICICI Bank said in a communication to the exchanges.
At the end of the December quarter, SBI Mutual Fund had 5.72% stake in ICICI Bank.
“In its letter, RBI has advised SBIFML to ensure that the total shareholding of the SBI group entities in the Bank remains below 10% of the paid up equity capital of the Bank at all times,” ICICI Bank further said adding that the approval to SBI Mutual Fund is valid for a period of one year that is up to March 22, 2023.
Last year the banking regulator accepted a set recommendation of an Internal Working Group (IWG) which was formed to review ownership guidelines and corporate structure for Indian private sector banks. Among others, RBI allowed financial institutions, supranational institutions, public sector undertakings to have 15% stake in private sector banks.
However, the central bank clarified that prior approval from the regulator is required by such an entity to pick up more than 5% stake in a private sector bank.
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