SBI Mutual Funds get RBI approval to acquire 9.99% stake in Karur Vysya Bank, increasing its presence in banking sector

Karur Vysya Bank (KVB) on 23 August announced that the Reserve Bank of India (RBI) granted its approval for SBI Mutual Fund (SBI MF) to acquire up to 9.99 per cent of the bank's paid-up share capital or voting rights. This strategic move will allow SBI MF to significantly increase its stake in KVB, strengthening its position in the banking sector, as per CNBC-TV18.

Livemint could not independently verify this news development.

The approval was conveyed through a letter dated August 23, 2024, from the RBI, in accordance with Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The RBI’s decision is contingent upon SBI MF's compliance with various banking and financial regulations, including the Banking Regulation Act of 1949, guidelines on the acquisition of shares, and the Foreign Exchange Management Act, 1999.

Karur Vysya Bank share price closed in red, down 0.60 per cent, at ₹222.20, on August 23, 2024, as per BSE.

The Bank enjoys a market capitalisation of ₹17,779.06 crore, as per BSE.

Karur Vysya Bank share price hit its last 52-week high on July 31, 2024 at ₹232.75, as per NSE.

SBI MF recent developments

KVB also clarified that this approval is subject to certain conditions. SBI MF is required to acquire the major shareholding within one year from the date of RBI's letter. Failure to do so will result in the cancellation of the approval. Additionally, SBI MF must ensure that its shareholding in KVB does not exceed 9.99 per cent of the bank’s paid-up share capital or voting rights. Should the shareholding fall below 5 per cent, SBI MF will need to seek fresh approval from the RBI to increase its stake again.

Additionally SBI Mutual Fund recently announced the launch of a thematic mutual fund i.e., SBI Innovative Opportunities Fund, which opened for public subscription on July 29, and closed on August 12, 2024.