MUMBAI: The Reserve Bank of India has approved HDFC Bank to acquire and hold an aggregate stake of up to 9.5% in IndusInd Bank, within the regulatory framework governing significant shareholding in banks. The approval, dated Dec 15, 2025, has been disclosed by IndusInd Bank in a regulatory filing on Tuesday.According to sources the approval is primarily to facilitate portfolio investments by HDFC’s group companies, primarily its mutual fund and insurance arms. Market participants view the holding as financial rather than strategic, with RBI norms and concentration limits making a takeover-style transaction unlikely.The approval permits HDFC Bank, as the sponsor and promoter of its broader financial services group, to hold up to 9.5% of IndusInd Bank’s paid-up share capital or voting rights on an aggregate basis. This includes holdings by group entities such as its mutual fund, insurance and other financial arms, rather than a direct acquisition on HDFC Bank’s own balance sheet.RBI’s nod is valid for one year from the date of its letter. If the applicant fails to acquire a “major shareholding” within this period, the approval will lapse automatically. The regulator has also stipulated that the aggregate holding must not exceed 9.5% at any point. If the holding falls below 5%, prior RBI approval will be required to raise it back to 5% or more.Importantly, RBI has clarified that HDFC Bank will not have any representation on IndusInd Bank’s board, underscoring that the approval does not confer management control or signal a change in ownership. The permission is subject to compliance with the Banking Regulation Act, RBI’s 2025 directions on acquisition and holding of shares in commercial banks, Sebi regulations and other applicable laws.The 9.5% threshold sits just below the 10% level, beyond which RBI scrutiny intensifies and control-related issues arise. Bankers said the approval effectively regularises and provides headroom for existing and prospective investments by HDFC group entities that were nearing or crossing the 5% “significant shareholder” mark, which requires fit-and-proper clearance.