LIC's Interest in HDFC Bank: The Reserve Bank has authorized LIC's increase in its interest in HDFC Bank

LIC's Interest in HDFC Bank: The Reserve Bank has authorized LIC's increase in its interest in HDFC Bank

LIC's Interest in HDFC Bank: The Reserve Bank has authorized LIC's increase in its interest in HDFC Bank

The Reserve Bank of India has authorized an increase in LIC's ownership of the private sector bank HDFC Bank.

Life Insurance Corporation of India (LIC) has been given permission to purchase a larger share in HDFC Bank, the biggest private sector bank in the nation. Now, LIC may purchase a maximum of 9.99 percent of HDFC Bank. This government insurance firm is permitted to raise its ownership by the Reserve Bank of India. LIC has already applied to RBI in this regard. LIC now owns 5.19 percent of HDFC Bank.

As per HDFC's disclosure to the stock market, LIC has been urged by RBI to increase its ownership in HDFC Bank within a year. In addition, RBI has mandated that LIC not raise its ownership position in the bank by more than 9.99 percent.

Obtaining RBI permission is required.

As per the Reserve Bank's regulations, any entity seeking to purchase a share of more than five percent in a bank must get clearance from the Reserve Bank. In addition, purchasing a share of less than five percent does not need authorization.

Sharp decline in HDFC Bank stock

On January 16, HDFC Bank released the results for the third quarter of the 2023–24 fiscal year. The bank made Rs 16,372 crore in profit this quarter, a 33.5 percent gain. In contrast, the bank's profit for the same time in the previous fiscal year was Rs 12,259 crore. In the same quarter of the previous financial year, the bank's total revenue was Rs 51,208 crore; at the same period, it grew to Rs 81,720 crore.

Following the release of the third quarter data, HDFC shares saw significant selling, and last week they hit a 52-week low. The bank's shares finished at Rs 1,440.70 on Thursday after declining 1.04 percent. On the last day of trading for the week, the Sensex finished at 70,700.67, down 0.51 percent.