MUMBAI: The Reserve Bank of India (RBI) has given Life Insurance Corporation of India (LIC) fresh approval to raise its stake in HDFC Bank to up to 9.99 per cent, reopening a route that the insurer had previously failed to use within the stipulated time.
LIC currently holds 4.11 per cent of HDFC Bank as of August 14, giving it room to acquire another 5.88 percentage points in the private-sector lender. The RBI's latest approval is dated August 19.
The approval is not LIC's first attempt to obtain a near-10 per cent holding. The RBI had granted a similar approval in January 2024, but the one-year window attached to that approval subsequently lapsed. The latest decision therefore effectively gives LIC another opportunity to build its holding in HDFC Bank.
The potential increase comes against a changing institutional ownership pattern at HDFC Bank. Mutual funds increased their holding in the bank to 30.62 per cent in June 2026 from 29.54 per cent in March, underscoring the growing role of domestic institutional investors in the bank's ownership structure.
LIC, however, is not obliged to take its holding to 9.99 per cent. The RBI approval only permits the insurer to acquire the additional shares, subject to applicable regulatory and statutory requirements.
