IndusInd Bank said the RBI has given approval to Life Insurance Corporation (LIC) to increase stakes in the bank by almost 10% on Friday.

The private bank has received an intimation from the RBI on December 9, 2021, that it has granted its approval to Life Insurance Corporation (LIC), shareholder of the bank to acquire up to 9.99% of the total issued and paid up capital of the bank, it said in a regulatory filing on stock exchanges.

Approval valid for one year

The state-run insurer holds 4.95% of the total issued and paid-up capital of the bank. The approval from the RBI is subject to the compliance with the direction on ‘Prior Approval for Acquisition of Shares and Voting Private Sector Banks’ as well as regulations of the Sebi and any guidelines or regulations.

The Reserve Bank last month had accepted most of the recommendations of its working group on corporate ownership of private sector banks, by allowing unrestrained promoter shareholding in the first five years of operations. It recommended hiking the same to 26% after 15 years from  15% and also the new capital requirements.

This was deemed beneficial for banks like Kotak Mahindra Bank and IndusInd Bank.The said approval is valid for a period of one year that is  up to December 8, 2022, the bank said. IndusInd Bank shares were marginally up at Rs 947 on BSE in afternoon trade.