The Reserve Bank of India (RBI) has approved Canara Bank’s stake sale in its mutual fund and insurance arms through an Initial Public Offering (IPO), the state-owned lender said on Thursday.
“Reserve Bank of India vide its letter dated 5th December 2024 has accorded approval to our Bank for divesting its shareholding in Canara Robeco Asset Management Company Ltd and Canara HSBC Life Insurance Company Ltd by 13 per cent and 14.5 per cent respectively through Initial Public Offer,” the bank said in a stock exchange filing.
In March 2024, the bank had received board approval to sell stakes in the two subsidiaries.
Canara Robeco AMC was established in 1993 and was initially known as Canbank Mutual Fund. In 2007, Canara Bank entered into a joint venture (JV) partnership with the Robeco Group, and the mutual fund was renamed Canara Robeco Mutual Fund.
Presently, Aditya Birla Sun Life Asset Management Company, HDFC Asset Management Company, Nippon Asset Management Company, and UTI Asset Management Company are the listed mutual fund companies.
Canara Bank holds a 51 per cent stake in Canara HSBC Life Insurance, while HSBC holds 26 per cent, and Punjab National Bank (PNB) holds the remaining 23 per cent.
In June 2024, PNB had announced plans to sell a 10 per cent stake in the life insurance company during the listing.
“Further, RBI has intimated that, in accordance with the exemption granted by the Government of India, the bank should adhere to the October 31, 2029, timeline for bringing its stake in these entities up to 30 per cent,” the lender added.
