Tuesday, February 27, 2024

Will HDFC Bank become bigger than SBI? This is how 6 big banks will be supported

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HDFC Bank (file photo)

The largest private sector bank in the country ‘HDFC Bank’ looks like it is going to become bigger than the country’s largest bank SBI. Recently, the Reserve Bank of India (RBI) has approved HDFC Bank Group to buy up to 9.5% stake in each of the country’s six big banks. Big banks like ICICI Bank and Axis Bank are also included in this. After the merger of HDFC Limited and HDFC Bank, this is a big deal for this private sector financial group.

The Reserve Bank of India on Monday gave approval to HDFC Bank to acquire stake in 6 banks. It also made it clear that its stake in each of these six banks can never exceed 9.5 percent. This means that if there is a change in the share holding pattern of investors other than HDFC in these banks, in that case HDFC Bank will have to buy or sell its extra shares and keep the overall share at 9.5 percent only. The voting rights of HDFC Bank also cannot exceed 9.5 percent.

HDFC Bank will buy stake in 6 banks

Apart from Axis Bank and ICICI Bank, HDFC Bank will buy stake in Suryoday Small Finance Bank, Bandhan Bank, Yes Bank and IndusInd Bank. Not only this, HDFC Bank can hold this stake in these banks only for one year i.e. till February 4, 2025. Many other companies also come under HDFC Bank Group. These include HDFC Mutual Fund, HDFC Life Insurance Company and HDFC Ergo General Insurance Company.

HDFC Bank told the stock markets in details that it had applied to RBI for this on December 18, 2023. After this, RBI gave it this approval on 5 February 2024.

HDFC Bank shares benefited

After getting this approval from RBI, shares of HDFC Bank are moving in the green zone on Tuesday. Its benefit was visible not only in HDFC Bank but also in the shares of ICICI Bank, Suryoday Small Finance Bank and Yes Bank. However, a declining trend is being seen in the shares of the other three banks.

This deal can also prove to be good for the revival of HDFC Bank shares. The bank’s shares have fallen by more than 13 percent in the last one month alone. Whereas since the beginning of this year till now it has fallen by 14.77 percent.

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