CNBC-TV18 has learnt that ICICI Prudential Mutual Fund is looking to acquire an additional 5 percent stake in Federal Bank.

The mutual fund has already submitted a proposal with the Reserve Bank of India (RBI) for the hike in stake in the lender.

Any entity which wishes to acquire more than 5 percent stake in a private bank, with a cap of 10 percent, has to go to RBI for approval.

Once RBI approves, ICICI Prudential MF could be raising the stake through preferential issue which will happen through Federal Bank or open market or both.

ICICI Prudential MF already holds about 4.84 percent in Federal Bank and with this additional 5 percent stake, they will be under that 10 percent mark mandated by the RBI.

Watch accompanying video of CNBC-TV18’s Yash Jain for more details.

(Edited by : Pranati Deva)

First Published:May 25, 2021 2:14 PM IST