Indian lender IndusInd Bank said on Tuesday that the country's central bank had approved HDFC Bank to acquire up to a 9.50% stake in the smaller private lender.
The Reserve Bank of India has mandated that HDFC Bank acquire a major shareholding within one year of the approval on December 15, failing which it will be cancelled.
In a filing on Monday night, HDFC Bank said that its group entities, such as HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Fund, and others, received the approval to buy an "aggregate holding" of up to 9.5% of the paid-up share capital or voting rights in IndusInd Bank.
IndusInd reported its largest-ever quarterly loss in the three months ended March 31, following a $230 million hit to its accounts, amid governance and accounting failures that prompted the departure of former CEO Sumant Kathpalia and Deputy CEO Arun Khurana earlier this year.
The bank's board has faced criticism from investors over shortfalls in oversight and delays in disclosing the accounting lapses in its derivative portfolio, which led to a hit to the bank's accounts.
Earlier this year, private sector lender IndusInd said it would raise up to $3.47 billion and allow promoters to nominate two board directors.
