Private bank on Friday said the RBI has given approval to Life Insurance Corporation to increase stake in the bank to nearly 10 per cent. The bank has received an intimation from the RBI on December 9, 2021, that it has granted its approval to Life Insurance Corporation (LIC), shareholder of the bank to acquire up to 9.99 per cent of the total issued and paid up capital of the bank, the bank said in a regulatory filing on stock exchanges.

The state-run insurer holds 4.95 per cent of the total issued and paid-up capital of the bank.

The RBI approval is subject to the compliance with the direction on ‘Prior Approval for Acquisition of Shares and Voting Private Sector Banks’ as well as regulations of the Sebi and any guidelines or regulations.

The Reserve Bank last month had accepted most of the recommendations of its working group on corporate ownership of private sector banks, by allowing unrestrained promoter shareholding in the first five years of operations. It recommended hiking the same to 26 per cent after 15 years from the extant 15 per cent and also the new capital requirements.

This was deemed beneficial for banks like Kotak Mahindra Bank and IndusInd Bank.

The said approval is valid for a period of one year i.e., up to December 8, 2022, the bank said.

IndusInd Bank shares were marginally up at Rs 947 on BSE in afternoon trade.