The Reserve Bank of India (RBI) has approved Zulia Investments Pte. Ltd., a subsidiary of Singapore’s state-owned investment firm Temasek Holdings, to buy up to 7% stake in AU Small Finance Bank.
The approval was granted through an RBI letter dated February 12, 2025. As per the RBI’s conditions, Zulia Investments and its associated entities must complete the share purchase within one year. If they fail to do so, the approval will be cancelled.
AU Small Finance Bank’s Share Price Movement
Following the news, AU Small Finance Bank’s stock was trading at ₹554.65 on the National Stock Exchange (NSE) at 11:40 AM, marking a slight increase of ₹0.25 (0.05%).
Regulatory Conditions for the Stake Purchase
The acquisition must comply with several financial and regulatory laws, including:
- Banking Regulation Act, 1949
- RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares in Banking Companies
- Foreign Exchange Management Act (FEMA), 1999
- Securities and Exchange Board of India (SEBI) regulations
Significance of Temasek’s Investment
Temasek Holdings is a major investment firm owned by the Singapore government. This potential investment in AU Small Finance Bank highlights Temasek’s growing interest in India’s banking sector.
If completed, the deal would strengthen AU Small Finance Bank’s investor base and could provide further growth opportunities in the financial sector.
