RBI approves LIC to acquire up to 9.99% stake in ICICI Bank within a year

RBI approval and timeline

The Reserve Bank of India approved Life Insurance Corporation of India's (LIC) application to acquire an aggregate holding of up to 9.99% of ICICI Bank's paid-up share capital or voting rights. The acquisition must be completed within one year from the date of the RBI approval letter, dated September 4, 2026; otherwise the approval stands canceled, according to ICICI Bank's regulatory filing. The approval is conditional on compliance with applicable statutory and regulatory provisions.

LIC's existing holding and regulatory ceiling

As of June 2026, LIC held a 4.35% stake in ICICI Bank, India's second-largest private sector bank. Existing rules cap LIC's stake in any commercial bank at 10%, a limit linked to LIC's status as promoter of IDBI Bank, where it holds a 49.24% majority stake. The Indian government is the next largest shareholder in IDBI Bank, with a 45.48% stake.

LIC's broader banking-sector stakes

LIC holds significant positions across several large Indian banks, including State Bank of India (8.53%), Punjab National Bank (8.83%), Axis Bank (7.87%), Bank of Baroda (5.14% via LIC New Pension Plus Secured Fund) and HDFC Bank (4.77%).

Rationale from LIC's leadership

LIC Chief Executive and Managing Director R. Doraiswamy, in a recent interaction with BusinessLine, framed the exercise as a realignment of long-held investments rather than a fresh build-up. "As a financial institution, we had to look at various options for investing funds in the interests of policyholders. There was also a nation-building objective, because the country needed to create institutions, and we were part of that initiative," he said. He added that, after LIC took a larger stake in IDBI Bank, the 10% ceiling in any commercial bank "had to realign our investments accordingly."

Next milestone

LIC has a twelve-month window from September 4, 2026, to complete market purchases up to the 9.99% aggregate holding threshold, subject to ongoing RBI compliance conditions. ICICI Bank's subsequent shareholding disclosures will mark the key checkpoint for any incremental acquisitions during this period.