A regulatory clearance has opened the door for a higher group level investment by one of India’s largest private sector lenders.
HDFC Bank has received approval from the Reserve Bank of India to permit its group entities to hold up to 9.50% stake in IndusInd Bank. The approval was issued through a letter dated December 15 and will remain valid for 1 year, until December 14, 2026.
The central bank has specified that the total holding must not exceed 9.50% of the paid up share capital or voting rights of IndusInd Bank at any point in time. The permission applies to the combined or “aggregate holding” of HDFC Bank and its group entities where the bank acts as promoter or sponsor.
The entities covered under this approval include HDFC Mutual Fund, HDFC Life Insurance Company Limited, HDFC ERGO General Insurance Company Limited, HDFC Pension Fund Management Limited, and HDFC Securities Limited. As per the Reserve Bank of India directions issued in 2025 for commercial banks on acquisition and holding of shares or voting rights, “aggregate holding” includes shareholding by the bank itself, bodies corporate under the same management or control, mutual funds, trustees, and promoter group entities.
HDFC Bank clarified that it does not plan to make any direct investment in IndusInd Bank. However, the combined investments of its group entities were expected to cross the earlier regulatory threshold of 5%. As a result, the bank applied to the central bank seeking approval to increase the permissible investment limit.
The application was submitted on October 24, 2025, on behalf of the group entities, as the regulatory directions apply at the bank level. HDFC Bank also stated that the investments made by its group entities are undertaken as part of their normal course of business.
The approval provides regulatory clarity for HDFC Bank and its subsidiaries as they continue their investment activities within the framework set by the central bank.
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