RBI Approves LIC to Acquire Up to 9.99% Stake in ICICI Bank
The Reserve Bank of India has approved Life Insurance Corporation of India (LIC) to acquire an aggregate holding of up to 9.99% of the paid-up share capital or voting rights of ICICI Bank. ICICI Bank disclosed the regulatory approval in an exchange filing on September 5, 2026.
The RBI’s approval letter was dated September 4, 2026, and ICICI Bank said it received a copy of the letter at 9:09 p.m. the same day. LIC must complete the acquisition within one year from the date of the approval; otherwise, the permission will lapse.
Importantly, the approval is an enabling permission, not confirmation that LIC will immediately purchase the entire additional stake. Any acquisition remains subject to applicable statutory and regulatory requirements and conditions imposed by the RBI.
LIC already holds a significant position in ICICI Bank. The new approval gives the state-owned insurer room to substantially increase its exposure to the country’s second-largest private-sector lender, potentially taking its holding close to the 10% regulatory threshold.
The decision follows a similar RBI approval last month allowing LIC to increase its holding in HDFC Bank to as much as 9.99%. The two approvals underline LIC’s expanding presence among India’s major private-sector banks.
LIC is already a major shareholder in several large Indian banks. Its holdings include stakes in State Bank of India, Punjab National Bank, Axis Bank and Bank of India, making the insurer an increasingly important institutional investor across India’s banking sector.
The move also comes as ICICI Bank has been attracting substantial foreign-currency deposits. The bank mobilised approximately $17.88 billion through the RBI’s foreign-currency non-resident deposit scheme by August 31, highlighting its ability to attract overseas funds and its importance within India’s financial system.
For LIC, increasing its ICICI Bank exposure could strengthen its long-term investment portfolio by gaining greater participation in the growth of one of India’s leading private lenders. For ICICI Bank, the presence of a large domestic institutional investor such as LIC could further reinforce its shareholder base.
The development is also significant from a regulatory perspective. Under RBI rules, investors seeking to acquire a substantial stake in a bank require prior regulatory approval, with 10% serving as the general ceiling for non-promoter investors. LIC’s permitted holding of 9.99% therefore brings it very close to that threshold.
The market will now watch whether LIC actually raises its stake and, if so, how and when the purchases are executed. The RBI approval gives LIC a one-year window, leaving considerable flexibility over the timing of any additional investment.
