The Reserve Bank of India has allowed two shareholders of IndusInd Bank and CSB Bank to increase their individual stakes to 10% each.
The banking regulator allowed State Bank of India’s (SBI) mutual fund arm to double its stake in Fairfax-controlled CSB Bank (formerly Catholic Syrian Bank).
This approval will be valid for one year until July 21, 2021, CSB Bank said in a stock-exchange filing.
SBI Funds Management Pvt. Ltd, through various schemes of SBI Mutual Fund, currently owns a 4.7% stake in the Kerala-based bank.
CSB Bank’s shares jumped 5.7% on Friday to close at Rs 195.3 apiece on the BSE after the RBI’s decision.
The bank is controlled by India-born Canadian billionaire Prem Watsa’s Fairfax Financial Holdings. The investment firm had acquired a 51% stake in CSB in 2018.
The RBI also gave a similar approval to US-based hedge fund Route One Investment Company LP to increase its stake in Hinduja Group-owned IndusInd Bank to 10%. The lender’s board had approved the proposed transaction on July 5.
Route One holds a 4.96% stake in the mid-sized private-sector lender. The hedge fund had approached the RBI seeking approval to increase its stake in IndusInd to as much as 10%.
IndusInd Bank’s shares climbed 1.61% to end at Rs 522.20 apiece on the BSE.