A big news related to HDFC Bank and its group companies is coming out. Actually, HDFC and its group banks have received approval from the Reserve Bank of India (RBI) to buy 9.5% stake in AU Small Finance Bank. This approval has been given by RBI on 3 January 2025. Let us tell you, HDFC Bank has one year time to buy this stake. If this deal is not completed within a year, the approval will be automatically canceled.
what is the whole matter
RBI has given approval to HDFC Bank and its subsidiaries, such as HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, HDFC ERGO General Insurance and HDFC Securities to buy this stake. This stake can be up to 9.5 percent of the total paid-up share capital or voting rights of AU Small Finance Bank.
It is important to follow the laws
This deal will be completely subject to regulatory terms and provisions. In this deal, it is necessary to follow the Banking Regulation Act, Foreign Exchange Management Act (FEMA) 1999 and Securities and Exchange Board of India (SEBI) rules. It is also important to follow RBI guidelines and other legal requirements.
Big achievement for HDFC Bank
This step is an important opportunity for HDFC Bank to increase its reach in the small finance banking sector. This will provide a great opportunity for HDFC Bank to reach new customers and expand its products.
Apart from this, AU Small Finance Bank will also benefit from this deal. Actually, HDFC Bank and its subsidiaries already have a strong hold in the financial sector. This deal will not only provide financial stability to AU SFB but will also strengthen their business model. This deal between HDFC Bank and AU Small Finance Bank can bring a big change in the Indian banking sector. If this deal is completed within the regulatory conditions and timelines, both the banks will get long term benefits from it.
Impact may be visible on shares
The impact of this deal can be seen on the shares of HDFC Bank. Last Friday, HDFC Bank shares were trading at Rs 1,748.40 with a decline of 2.53 percent. Due to this news, it is expected that movement can be seen in the shares of HDFC Bank on Monday.
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