RBI Approves HDFC AMC's Stake Purchase In DCB & Karur Vysya Bank

The Reserve Bank of India (RBI) has granted permission to HDFC Asset Management Company (AMC) to acquire a maximum of 9.5 per cent ownership in both DCB Bank and Karur Vysya Bank.

This approval from the RBI is valid for one year from the date of issuance, as confirmed by both banks in their official statements. The central bank has also instructed HDFC AMC that their shareholding in these two private banks should not surpass 9.5 per cent.

Earlier in June, the RBI had similarly permitted Tata AMC to purchase a 7.5 per cent stake in DCB Bank.

In September, DCB Bank has witnessed a positive trend, with its stock gaining over 6 per cent, while Karur Vysya Bank's shares have surged by more than 10 per cent. In the year-to-date performance, DCB Bank has experienced a slight decline of 2 per cent, whereas Karur Vysya Bank has advanced by an impressive 18 per cent.

Regarding financial performance, Karur Vysya Bank (KVB) reported a substantial 56.7 per cent increase in net profit, reaching Rs 359 crore in Q2 2023 compared to Rs 229 crore during the same period last year. Furthermore, deposits at KVB grew by 14 per cent to Rs 80,715 crore in Q1 FY24, up from Rs 70,961 crore in the corresponding period the previous year. However, the bank's borrowings decreased by 41 per cent to Rs 1,555 crore in Q1 FY24, down from Rs 2,611 crore in April-June FY23.

DCB Bank, on the other hand, showed a remarkable 31 per cent rise in net profit for Q1FY24, reaching Rs 127 crore, as opposed to Rs 97 crore during the same period the previous year. The bank's total income also witnessed a significant increase, rising by 24 per cent to Rs 578 crore in the June quarter, compared to Rs 466 crore in the same quarter last year.