The Reserve Bank of India has approved LIC’s proposal to increase its stake in ICICI Bank to as much as 9.99%. The approval is valid for one year and remains subject to regulatory conditions.
Highlights
- RBI allows LIC to raise its ICICI Bank stake to up to 9.99%.
- LIC held 8.83% in ICICI Bank as of June 2026.
- Mutual funds held 29.60% in the private-sector lender.
- LIC must complete the acquisition within one year of RBI’s approval letter.
The Reserve Bank of India (RBI) has approved Life Insurance Corporation of India’s proposal to increase its stake in ICICI Bank to as much as 9.99% of the private-sector lender’s paid-up share capital or voting rights.
The approval gives the state-owned insurance giant additional room to increase its investment in ICICI Bank, where it already holds a significant stake.
As of the June 2026 quarter, LIC held an 8.83% stake in ICICI Bank. Mutual funds were the largest institutional shareholder group, with a 29.60% holding, while insurance companies collectively owned 8.24%.
The RBI’s approval will remain valid for one year from the date of its approval letter. If LIC does not complete the proposed acquisition within this period, the approval will lapse.
However, the central bank’s clearance is an enabling provision and does not mean LIC must immediately increase its holding to the maximum permitted level of 9.99%. Any increase in the insurer’s stake will continue to be subject to applicable regulatory requirements and LIC’s own investment decisions.
Under RBI’s shareholding norms, an investor seeking to acquire 5% or more of the paid-up share capital or voting rights in a bank requires prior approval from the central bank. For non-promoters, the prescribed shareholding ceiling is generally 10%, with higher limits applicable to certain categories of investors.
The latest clearance gives LIC greater flexibility to increase its ownership in ICICI Bank, one of India’s largest private-sector banks, if it chooses to do so.
The move follows another RBI approval last month that allowed LIC to raise its stake in HDFC Bank to as much as 9.99%. As of August 14, LIC held 4.11% of HDFC Bank’s total share capital.
