IDFC First Bank has received permission from the Finance Ministry to raise its shareholding above 30% in Niraj Kakkad Constructions. This was done after recommendations from the Reserve Bank of India (RBI).
Under Section 19(2) of the Banking Regulation Act, 1949, banks are not allowed to hold more than 30% stake in any company—whether directly or indirectly through pledges, mortgages, or outright ownership. However, the Finance Ministry has now granted an exemption for IDFC First Bank from this rule.
This is not the first time the government has made such an exception. In March 2020, the RBI allowed the State Bank of India (SBI) to exceed the 30% ownership limit to help rescue Yes Bank. SBI’s stake reached around 48% but was later reduced to below 30%.
According to its latest annual report, IDFC First Bank saw solid business growth in FY25:
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IDFC First Bank is a private-sector bank headquartered in Mumbai, India. It was established in 2015 as the banking arm of IDFC Limited. After merging with Capital First in 2018, the bank transitioned from primarily financing infrastructure projects to focusing on retail banking services. In 2024, it completed a reverse merger by acquiring its parent company, IDFC Limited.
As of July 8, 2025, IDFC First Bank share price closed at ₹77.86.
The Finance Ministry’s approval gives IDFC First Bank flexibility to raise its stake in Niraj Kakkad Constructions beyond legal limits. This move, backed by the RBI, mirrors previous exceptions made for strategic reasons. Despite strong deposit and loan growth, the bank's falling profit suggests the need for careful financial planning ahead.
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Published on: Jul 9, 2025, 9:25 AM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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