The Reserve Bank of India has approved the Life Insurance Corporation of India (LIC) to raise its stake in IndusInd Bank by up to 9.99%. The insurer holds 4.95% in the private lender.

The bank, in a BSE filing, said it the central bank told it about the approval on Thursday. The approval is subject to compliance with various regulations and rules including Master Direction on 'Ownership in Private Sector Banks and regulations of the Securities and Exchange Board of India.

The approval is valid for one year--that is up to December 8, 2022. As per RBI norms, approval is required to increase stake in private banks beyond 5%.

IndusInd Bank stock was trading 0.81 higher at Rs 954 per share on the BSE.