Federal Bank Share Price in Focus; RBI Approves SBI Mutual Fund to Acquire Stake Up to 9.99%

Federal Bank said it has received approval from the Reserve Bank of India for SBI Mutual Fund to acquire a higher shareholding in the bank.  

The approval was communicated by the RBI on January 30, 2026, and relates to proposed share purchases by the mutual fund. 

Extent of the Permitted Holding 

The approval allows SBI Mutual Fund to acquire an aggregate stake of up to 9.99% in Federal Bank. This limit applies to the bank’s paid-up share capital or voting rights. The threshold is calculated on a combined basis across all schemes operated by the mutual fund. 

Meaning of “Aggregate Holding” 

Under banking regulations, holdings by different schemes of the same mutual fund are clubbed together. Even if investments are made through multiple schemes, the overall shareholding and voting rights cannot exceed the approved ceiling. Any breach of the limit would require prior regulatory permission. 

Conditions Linked to the Approval 

The RBI approval is subject to compliance with existing laws and directions. These include the Banking Regulation Act, 1949, and the Reserve Bank of India (Commercial Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025, issued on November 28, 2025, as amended from time to time.  

The approval also requires adherence to the Foreign Exchange Management Act, 1999, and regulations issued by the Securities and Exchange Board of India. 

Regulatory Oversight of Bank Shareholding 

The RBI requires prior approval when investors seek to cross specified shareholding levels in banks. The framework is intended to track ownership concentration and voting power in regulated entities. Mutual funds, insurers, and other institutional investors are subject to these limits. 

Timeline and Implementation 

Federal Bank stated that it received the RBI’s intimation on January 30, 2026. The approval does not set out a fixed schedule for acquisitions. Any share purchases by SBI Mutual Fund will depend on market transactions and continued compliance with applicable regulations. 

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Federal Bank Share Price Performance  

As of February 1, 2026, 10:39 am, Federal Bank share price was trading at ₹287.40, a 0.07% down from the previous closing price. 

Conclusion 

The approval sets a clear ceiling for SBI Mutual Fund’s holding in Federal Bank. Further acquisitions must remain within the 9.99% limit and follow the conditions laid down under banking, securities, and foreign exchange laws. 

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