RBI approves SBI MF's 9.99% stake in Karur Vysya Bank
The Reserve Bank of India (RBI) has approved a proposal by SBI Mutual Fund (SBI MF) to acquire a stake of up to 9.99% in Karur Vysya Bank (KVB), per CNBC-TV18. This development, revealed by KVB on August 23, will significantly bolster SBI MF's presence in the banking sector. The approval was communicated through a letter from the RBI, under Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015.
Acquisition subject to regulatory compliance
The RBI's approval is conditional on SBI MF adhering to various banking and financial regulations. These include the Banking Regulation Act of 1949, guidelines on share acquisition, and the Foreign Exchange Management Act, 1999. On August 23, KVB's shares closed at ₹222.20, marking a slight decrease of 0.60%. Despite this minor dip, the bank maintains a robust market capitalization of ₹17,779.06 crore as per BSE data.
Timeframe and conditions for SBI MF's stake acquisition
SBI MF must complete the majority of its share acquisition within one year from the date of RBI's letter. Failure to do so will lead to the revocation of this approval. Additionally, it is mandated that SBI MF's stake in KVB does not surpass 9.99% of the bank's paid-up share capital or voting rights. If their stake falls below 5%, they will have to seek fresh approval from the RBI to increase it again.
