OSLO, March 16 (Reuters) - Norway's DNB, the country's largest bank, will be allowed to acquire online rival Sbanken, the Norwegian Competition Tribunal (NCT) ruled on Wednesday, overturning an earlier ban.

The Norwegian Competition Authority (NCA) had sought to block the proposed 11.1 billion Norwegian crowns ($1.24 billion) deal, arguing that it would hurt the mutual funds market.

"The NCT has concluded that there was no basis to reject the contemplated acquisition and has consequently repealed the NCA's decision," DNB said in a statement.

"Settlement of the offer will take place no later than March 30."

More than 90% of Sbanken's shareholders have accepted DNB's offer, which was backed by the board and management of both banks. ($1 = 8.9210 Norwegian crowns) (Reporting by Terje Solsvik Editing by Gwladys Fouche and David Goodman )