Indian Overseas Bank has received official approval from the Reserve Bank of India (RBI) to establish an International Financial Services Centre (IFSC) banking unit in Gujarat International Finance Tec-City (GIFT City). The regulatory clearance was communicated through an official RBI letter dated December 29, 2025, marking a significant development for the public sector bank as it expands its footprint in India's premier international financial hub.

Official RBI Approval Details

The bank received formal permission through an RBI letter dated December 29, 2025. Indian Overseas Bank has notified stock exchanges BSE and NSE about this development through a regulatory filing under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations. The communication was issued from the bank's central office and signed by Ram Mohan K, Compliance Officer of Indian Overseas Bank.

Strategic Expansion into GIFT City

The approval allows Indian Overseas Bank to set up specialized banking operations within the IFSC framework at GIFT City. This move positions the bank to capitalize on the growing opportunities in international financial services and enhances its ability to serve global clients from India's financial gateway. The bank requested both exchanges to take the information on record and make it available on their respective websites.

IFSC Banking Unit Benefits

The establishment of an IFSC banking unit will enable Indian Overseas Bank to offer international banking services under the IFSC regulatory framework, serve multinational corporations and international clients, access global financial markets more effectively, and expand revenue streams through specialized financial products. The setting up of this unit will enable the bank to expand its presence in international financial services within the regulatory framework of the IFSC.

Regulatory Milestone

The RBI approval represents a crucial regulatory milestone for Indian Overseas Bank's expansion strategy. GIFT City serves as India's first operational smart city and international financial services centre, providing a conducive environment for banks to offer world-class financial services to domestic and international clients. This development aligns with the government's vision of establishing India as a global financial hub and demonstrates Indian Overseas Bank's commitment to participating in the country's evolving financial services landscape.

The Government of India has filed a comprehensive Regulation 29 disclosure with stock exchanges confirming the successful completion of its Indian Overseas Bank share divestment through the Offer for Sale mechanism. The transaction, conducted on December 17-18, 2025, involved the sale of 417.84 million equity shares, reducing the government's shareholding from 94.61% to 92.44% in the public sector bank.

Regulation 29 Filing and Transaction Details

The Department of Financial Services, Ministry of Finance, submitted the mandatory disclosure under Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, on December 19, 2025. The filing was signed by Director Jitendra Asati and addressed to the bank's board of directors along with BSE and NSE listing departments.

OFS Structure and Components

The offer comprised multiple components as outlined in the government's December 16, 2025 notice to stock exchanges. The base offer size included 385.13 million equity shares representing 2% of the bank's total paid-up equity share capital, with an oversubscription option of 192.57 million shares representing an additional 1%.

Shareholding Changes and Compliance

The disclosure reveals the government's shareholding position before and after the transaction, with detailed breakdowns of voting rights and share categories. Prior to the sale, the government held 1.82 billion shares carrying voting rights, representing 94.61% of the bank's total share capital.

Regulatory Framework and Guidelines

The transaction was conducted under comprehensive SEBI guidelines, including the master circular SEBI/HO/MRDPoD2/CIR/P/2024/00181 dated December 30, 2024, pertaining to offer for sale through stock exchange mechanism. The process also followed revised operational guidelines issued by both BSE (notice 20240701-19 dated July 1, 2024) and NSE (circular 93/2024 dated July 12, 2024).

The successful completion of this divestment transaction demonstrates the government's continued commitment to strategic stake reduction in public sector banks while maintaining regulatory compliance and market transparency through proper disclosure mechanisms.