RBI Approves SBI Mutual Fund to Acquire Up To 10% Stake in RBL Bank

RBL Bank stated on February 25, 2026, that the Reserve Bank of India (RBI) has granted approval for SBI Mutual Fund to acquire an aggregate holding of up to 9.99% in the private sector lender. The communication was received by the bank via email on February 25, 2026, confirming the regulator’s decision.

The RBI’s approval allows SBI Mutual Fund a period of 1 year from the date of the letter to complete the acquisition. The update was disclosed through a stock exchange filing, highlighting the regulatory constraints and required compliance steps.

RBI Grants Conditional Approval for Stake Acquisition

According to RBL Bank, the RBI’s letter dated February 25, 2026, permits SBI Mutual Fund to purchase up to 9.99% of the bank’s paid-up share capital or voting rights. The approval requires strict adherence to the stated limit and prohibits exceeding the 9.99% threshold at any time.

If SBI Mutual Fund’s holding drops below 5%, fresh RBI approval will be needed to increase the stake beyond that level again. The approval was issued in response to the fund house’s earlier application and is subject to additional conditions prescribed by the RBI.

Overview Of RBL Bank’s Operations

RBL Bank is a private sector lender offering a wide range of retail, corporate, and SME banking services across India. The bank has expanded its footprint over the years through digital offerings and branch-based services.

Its customer base includes individuals, small enterprises, large corporates, and financial institutions. The latest regulatory development comes at a time when the bank continues to strengthen its capital structure and governance framework.

Details Of SBI Mutual Fund’s Existing Shareholding

As of February 20, 2026, SBI Mutual Fund held 1.88% of RBL Bank’s equity share capital. The new approval significantly expands the potential ownership threshold available to the fund house.

The RBI’s decision enables SBI Mutual Fund to scale its investment, subject to ongoing compliance with shareholding norms. The upper limit of 9.99% aligns with regulatory guidelines governing substantial acquisition in private sector banks.

Regulatory Requirements and Next Steps

The RBI has prescribed that the proposed acquisition must be completed within 1 year from February 25, 2026. SBI Mutual Fund is required to continuously ensure that its aggregate holding remains within the permitted ceiling.

Any change in holding that necessitates breaching lower thresholds, such as falling below 5%, would trigger the need for renewed RBI approval before further increases. RBL Bank has communicated that all conditions outlined in the RBI’s letter will need to be followed meticulously to maintain regulatory compliance.

Read More: SBI Mutual Fund May File Draft Papers for $1.5 Billion IPO in March.

Conclusion

RBL Bank’s disclosure marks an important regulatory development allowing SBI Mutual Fund the flexibility to expand its stake up to 9.99%. The conditions set by the RBI aim to ensure controlled and transparent ownership changes within the banking sector.

The approval also aligns with the regulator’s broader oversight of significant shareholding movements in private banks. The bank has confirmed that the approval follows due process and is tied to compliance requirements outlined by the RBI.

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