In a second revision to the Axis Bank-Max Life deal structure, Axis Bank along with subsidiaries Axis Capital and Axis Securities will take a 19% stake in the insurer instead of the proposed 17%.

The move comes after objection from the Reserve Bank of India (RBI) – the central bank of the country.

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Under the amended structure, Axis Bank will have a 9% interest in the insurer while Axis Securities and Axis Capital will collectively have a 3% holding.

The agreement also includes the provision of a stake acquisition of up to a 7% in Max Life Insurance in one or more tranches in the future.

The rejigged deal will be guided by Para 5(b) of Master Direction- RBI, stated the lender.

The private sector lender originally proposed the acquisition of a 29% stake in Max Life.

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In August this year, the private sector lender cut down the size of the stake that it planned to purchase in the insurer to 17% from 29% to avoid regulatory hurdles. However, this proposal has now been rejected by the apex bank.

“In response to Axis Bank’s application to the Reserve Bank of India for directly acquiring 17.002% of the equity share capital of Max Life, the Reserve Bank of India has advised Axis Bank that the application for direct acquisition of 17.002%% has not been considered,” the bank said in a stock exchange filing.

At present, the bank holds a stake of over 1% in Max Life. Max Financial Services and Mitsui Sumitomo Insurance own stakes of 72.5% and 25.5%, respectively, in the insurer.

“The Revised Agreements will supersede the previous agreements entered into between the parties. The transaction is subject to conditions precedent, including regulatory approvals,” added the bank in the filing.