Capital market regulator Securities and Exchange Board of India has issued a show cause notice (SCN) to Axis Bank and its subsidiaries in a case related to stake buy in Max Life Insurance.

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In a regulatory filing, Axis Bank said the SCN was issued on October 25 through email.

Axis Bank, and its subsidiaries, Axis Securities Limited and Axis Capital Limited, have received an SCN through email from the Sebi, it said.

The SCN is being reviewed and will be filing responses to the SCN with Sebi as the said transactions were undertaken with requisite regulatory approvals, it said.

Meanwhile, Max Financial Services Limited, the holding company of Max Life Insurance also said a few directors and a few key managerial personnel of the company (in each case, 'both past and present) have received a SCN through email from Sebi.

Earlier this year, the Axis Bank's board of directors approved the proposal to acquire Max Life shares, raising Axis entities' total holding in the insurance firm to 19.99 per cent from 19.02 per cent.

Axis Bank and its two subsidiaries - Axis Capital Ltd and Axis Securities Ltd - were allowed to collectively own about 20 per cent of Max Life Insurance by the Insurance Regulatory and Development Authority of India (IRDAI).

The stake was acquired as part of a deal closed in 2021 between Axis Bank and Max Life Insurance.

Last year, Axis Bank entered into a revised agreement with Max Financial Services to acquire an additional 7 per cent stake in Max Life Insurance at fair market value using the discounted cash flow method.

The revision in the agreement follows the guidance issued by the IRDAI in October 2022.