SBI Mutual Fund: Reserve Bank of India has allowed SBI Mutual Fund to buy up to 9.99% stake in Bank. Bank informed the stock exchange on Thursday that, vide letter dated February 25, 2026, the RBI has permitted SBI Mutual Fund to purchase up to 9.99% of the bank’s paid-up share capital. The bank said that the approval is based on the Banking Regulation Act, 1949; RBI Directive, 2025; Foreign Exchange Management Act, 1999; and is subject to compliance with other applicable laws and guidelines including regulations issued by the Securities and Exchange Board of India (SEBI).
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The RBI has also clarified that if the applicant does not acquire the proposed majority stake within one year from the date of writing the letter, the approval will be automatically cancelled. Further, the total holdings of SBI Mutual Fund should never exceed 9.99 per cent of the bank’s paid-up share capital or voting rights. In a major development in the Indian banking sector, the Reserve Bank of India (RBI) has approved SBI Mutual Fund to buy up to 9.99 per cent of the paid-up share capital of Bank. Bank informed the stock exchange on Thursday that this permission has been given through a letter received from RBI dated 25 February 2026.
According to a bank statement, the approval is subject to various statutory and regulatory conditions. It includes the Banking Regulation Act, 1949; RBI Directive 2025 (as amended from time to time, effective from 28 November 2025); Foreign Exchange Management Act, 1999; It also includes the rules and other applicable guidelines issued by the Securities and Exchange Board of India (SEBI). The bank has made it clear that it is mandatory to strictly follow all the relevant rules.
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RBI has also mentioned some important conditions in its letter. If SBI Mutual Fund does not complete the proposed share purchase within one year from the date of approval, the approval shall automatically be deemed cancelled. That is, the transaction will need to be completed by February 25, 2027. Also, it has been expressly stipulated that in no case the total shareholding limit of SBI Mutual Fund shall not exceed 9.99 per cent of the paid-up share capital or voting rights of the bank.
According to market analysts, this move may help stabilize Bank’s capital structure. A potential investment by a large and reliable mutual fund organization is considered a positive sign for the bank. This is likely to boost investor confidence and boost the bank’s long-term growth plans. Overall, the RBI’s approval paves the way for a potential transaction between Bank and SBI Mutual Fund. Now the market is paying attention to how and to what extent this share purchase transaction is actually completed in the next year.
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