Life Insurance Corporation of India (LIC) has received regulatory clearance from the county’s central bank to increase its stake in private sector lender Induslnd Bank.
India’s largest insurer, which currently holds a 4.95% stake in Induslnd Bank, will increase its stake to 9.99%.
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“We are pleased to inform you that the bank has received an intimation from the Reserve Bank of India (RBI) on 9 December 2021, that it has granted its approval to Life Insurance Corporation (LIC), a shareholder of the bank, who holds 4.95% of the total issued and paid-up capital of the Bank, to acquire up to 9.99% of the total issued and paid-up capital of the Bank,” Induslnd Bank said in a regulatory filing.
The lender noted that RBI’s approval is valid for one year.
Recently, LIC received approval from RBI to increase its stake in another Indian private lender Kotak Mahindra Bank.
The government-owned insurance giant will increase its stake in Kotak Mahindra Bank to 9.99%.
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By GlobalDataRBI’s norms mandate that any person or entity willing to acquire more than a 5% stake in a private bank must take approval from the central bank.
Last month, the central bank changed the rules related to the ownership and corporate structure of private sector banks.
Additionally, the RBI noted that shareholding for individuals and non-financial groups will be capped at 10%.
Separately, LIC is planning to launch its initial public offering by March next year, which could value the insurer at $109bn.
