HDFC Bank has received approval from the Reserve Bank of India (RBI) to acquire up to a 9.5% stake in IndusInd Bank, paving the way for the country’s largest private lender to become a significant shareholder in the troubled private sector bank.
IndusInd Bank informed stock exchanges on Tuesday that the approval was granted on December 15, subject to specific conditions. The RBI has asked HDFC Bank to complete the acquisition of the permitted stake within one year from the date of approval. If the investment is not completed within the stipulated timeframe, the regulatory approval will stand cancelled, the lender said.
The move comes at a time when IndusInd Bank has been grappling with financial and governance challenges, which have weighed on investor confidence in recent months. The RBI’s timeline condition is aimed at ensuring timely compliance with regulatory norms and preventing prolonged uncertainty around ownership changes.
Group Entities to Invest
In a separate exchange filing, HDFC Bank said that several of its group entities have also received regulatory permission to invest in IndusInd Bank. These include HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Fund, and other group companies. Collectively, these entities can acquire an aggregate holding of up to 9.5% of IndusInd Bank’s paid-up share capital or voting rights.
Backdrop of Governance Issues
IndusInd Bank recently reported its largest-ever quarterly loss for the three months ended March 31, after taking a $230 million hit due to governance and accounting lapses linked to its derivatives portfolio. The crisis led to the exit of former CEO Sumant Kathpalia and Deputy CEO Arun Khurana earlier this year.
The bank’s board has since faced criticism from investors for weak oversight and delays in disclosing accounting issues. To strengthen its balance sheet and governance, IndusInd Bank has announced plans to raise up to $3.47 billion and allow promoters to nominate two directors to the board.
HDFC Bank’s Strong Brand Position
Separately, HDFC Bank has regained the top spot as India’s most valued brand for 2025, overtaking Tata Consultancy Services (TCS), according to the Kantar BrandZ report. The lender’s brand value now stands at $44.9 billion, reflecting its scale, stability, and market leadership.
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