The Reserve Bank of India (RBI) has allowed asset management company SBI Funds Management to acquire a stake of up to 9.99% stake in HDFC Bank.

The central bank has advised SBI Funds Management—a joint venture between State Bank of India and France’s AMUNDI—to acquire the stake by 15 November 2023, HDFC Bank said in a regulatory filing.

SBI Funds Management must ensure that its aggregate holding remains below 10% of the paid-up share capital or voting rights of HDFC Bank. 

The asset management company (AMC) currently holds a 5.07% stake in HDFC Bank and another 3.79% in mortgage financier HDFC Ltd.

HDFC Bank is in the process of merging with its parent company HDFC Ltd. 

The RBI nod to take the stake up to 9.99% will ensure that the AMC complies with norms on shareholding in banks.

SBI currently owns 63% stake in SBI Funds Management, while AMUNDI Asset Management holds the rest through its Indian subsidiary.