LIC Gets RBI Nod To Hike HDFC Bank Holding From 4.11% To 10%

The Reserve Bank of India has given Life Insurance Corporation of India the green light to expand its stake in HDFC Bank to nearly 10%, HDFC Bank confirmed in a stock exchange filing on August 19.

The central bank's letter, dated the same day, permits LIC to hold up to 9.99% of the bank's paid-up share capital or voting rights. LIC's current holding stands at 4.11%, based on beneficial ownership data as of August 14.

Quoting the RBI communication, HDFC Bank's filing read, "We would like to inform you that the Reserve Bank of India ('RBI') vide its letter dated August 19, 2026, has accorded its approval to Life Insurance Corporation of India ('LIC'), for acquiring aggregate holding up to 9.99% of the paid-up share capital or voting rights in HDFC Bank Limited ('the Bank')."

Regulatory Conditions Apply

LIC cannot act on this approval freely. Several regulatory frameworks will govern how and whether the insurer builds up its position, including the Banking Regulation Act, 1949, the RBI's 2025 directions on acquisition and holding of shares in commercial banks, the Foreign Exchange Management Act, 1999, and SEBI's rules.

Getting RBI clearance is different from acting on it. LIC now has the room to move from its present 4.11% stake toward the 9.99% ceiling, but nothing in the approval obligates it to do so. Whether and when the insurer raises its stake further will depend on its own investment calls, made within the boundaries the regulator has set.

Both entities carry significant weight in their respective sectors. LIC ranks among India's biggest institutional investors, and HDFC Bank is one of the country's largest private lenders. A bigger LIC stake would mean deeper insurer exposure to banking, at a time when regulators keep a close watch on who holds how much of India's financial institutions.

HDFC Quarterly Numbers

News of the approval landed a month after HDFC Bank released its first-quarter results for FY27. Standalone net profit came in at ₹19,059.72 crore for April to June, up 4.98% from a year earlier.

Net interest income grew 6.7% year-on-year to ₹33,535.95 crore, missing analyst expectations pegged at ₹34,353 crore. Net interest margin was recorded at 3.26% on total assets and 3.40% on interest-earning assets for the quarter.

Deposits and advances both climbed. Average deposits rose 10.8% year-on-year to ₹30,386 billion, while advances grew 13.3% to reach ₹30,115 billion.

Asset quality showed a marginal decline: gross non-performing assets ticked up to 1.17% of gross advances as of June 30, against 1.15% at the end of March.