India, Dec. 16 -- The Reserve Bank of India has allowed HDFC Bank Ltd. to acquire up to 9.50% stake in IndusInd Bank Ltd., in the aftermath of a scandal that eroded the top line of the smaller private lender.

HDFC Bank has to acquire a major shareholding in IndusInd Bank within a year of approval on 15 December, failing which it will be cancelled, India's largest private bank said in a late-night exchange filing on Monday. The acquisition can be done at the group level, meaning HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Fund can pick up stakes in IndusInd Bank.

IndusInd reported its largest-ever quarterly loss in the three months ended 31 March 2025, following a $230-million scandal that involved its former CEO Sumant Kathpalia...