RBI approves Life Insurance Corporation's stake increase in HDFC Bank

The Reserve Bank of India has cleared the way for Life Insurance Corporation of India to increase its stake in HDFC Bank, according to regulatory filings reviewed by the central bank.

LIC's application for the stake expansion has received formal approval from the RBI, removing a key regulatory hurdle for the transaction. The state-owned insurer currently maintains a 4.11 percent shareholding in HDFC Bank, one of India's leading private sector lenders.

The approval comes as institutional investors continue to adjust their portfolios following major corporate transactions in India's financial sector. HDFC Bank, which completed its merger with Housing Development Finance Corporation in 2023, has seen significant shifts in its shareholder base in recent months.

LIC's move to expand its stake in HDFC Bank represents a strategic investment by India's largest life insurer in the country's banking sector. The exact size of the proposed stake increase has not been disclosed publicly, though the approval from India's central bank suggests the transaction is expected to proceed in the coming period.

Detailed terms of the investment and the timeline for completion of the stake acquisition remain to be announced by the respective institutions.