Dec 16 (Reuters) - India's central bank has approved HDFC Bank's subsidiaries to acquire up to a 9.5% stake in smaller peer IndusInd Bank, the country's largest private sector lender by market value said late on Monday.
The approval is valid for a year from the Reserve Bank of India's letter dated December 15, HDFC Bank said in a statement.
The bank's 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, it added.
IndusInd reported its largest-ever quarterly loss in the three months to 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.
Reporting by Gursimran Kaur in Bengaluru; Editing by Rashmi Aich
Source: Reuters