Mumbai: Reserve Bank of India allowed Life Insurance Corp. of India to double its stake in private-sector lender IndusInd Bank Ltd., the company said in a filing to exchanges.
The nation’s largest insurer can raise its stake in the bank founded by the billionaire Hinduja brothers up to 9.99% from the current 4.95%, the bank said in the filing on Friday. The approval to raise holdings is valid for one year, according to the filing.
This is the second time in two weeks that the regulator has allowed LIC to raise its stake in a local lender. Last month, it said that the insurer could raise its stake in Kotak Mahindra Bank to almost 10%.
The announcements come after the central bank recently relaxed the ownership rules in private banks. Founders are now allowed to raise their stakes to 26% from 15% currently. Detailed operational guidelines are in the works.
Uday Kotak, the world’s richest banker who founded Kotak Mahindra Bank Ltd., already owns 26% in the lender after a protracted court case with the regulator. The billionaire Hinduja brothers are keen to increase their founding stake in IndusInd Bank now that the final rules have been announced. – Bloomberg.
Also read: Real estate industry lauds RBI’s move to maintain status quo on interest rates