In what can be seen as a relief for HDFC Bank and HDB Financial Services Ltd., the Reserve Bank of India has removed the proposed regulatory restriction on business overlaps of bank and its group entities.
“The proposed regulatory restriction on overlap in the businesses undertaken by a bank and its group entities is being removed from the final guidelines. The strategic allocation of business streams among group entities will be left to the wisdom of bank boards,” RBI Governor Sanjay Malhotra said on Wednesday.
To add some context, RBI’s draft circular from Oct 2024 proposed limits on excessive overlap between businesses done by banks and their NBFC units. This move was seen to directly impact a few banks and their NBFC subsidiaries, including HDFC Bank and HDB Financial.
