The Reserve Bank of India (RBI) on Wednesday (November 29) has given its approval to SBI Mutual Fund (SBI MF) for acquiring an aggregate holding of up to 9.99% of the paid-up share capital or voting rights of private sector lender Karur Vysya Bank Ltd.
However, the approval comes with stringent conditions to ensure regulatory compliance.
SBI MF is required to adhere to the relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction, and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies issued on January 16, 2023 (as amended from time to time), as well as provisions of the Foreign Exchange Management Act, 1999.
Additionally, SBI MF must comply with regulations issued by the Securities and Exchange Board of India (SEBI) and any other applicable guidelines, regulations, and statutes, Karur Vysya Bank said in a regulatory filing.
The approval is contingent on SBI MF acquiring a major shareholding within one year from the date of RBI's letter. Failure to do so would result in the cancellation of this approval.
Moreover, SBI MF is mandated to ensure that its aggregate holding in Karur Vysya Bank does not exceed 9.99% of the paid-up share capital or voting rights at any given time.
The regulatory conditions further stipulate that if the aggregate holding falls below 5%, SBI MF will need prior approval from the RBI to increase it to 5% or more of the paid-up share capital or voting rights of Karur Vysya Bank.
Shares of Karur Vysya Bank Ltd ended at ₹153.25, up by ₹1.95, or 1.29%, on the BSE.
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