In compliance with promoter stake reduction requirement: Kotak Bank

The bank was required to bring down the promoter’s shareholding to 26%
Private sector lender Kotak Mahindra Bank on Monday said it had achieved compliance with the Reserve Bank of India (RBI) norms in respect of dilution of promoter Uday Kotak’s shareholding.

The bank was required to bring down the promoter’s shareholding to 26 per cent. “In relation to the matter of dilution of promoters’ shareholding in the bank, the bank has achieved compliance with the promoter shareholding reduction requirement set out in the RBI’s letters dated January 29, 2020, and February 18, 2020, on August 10, 2020, within the timeline prescribed by the RBI,” the bank said in a regulatory filing.

In February this year, the bank had informed that the RBI had given its approval in relation to dilution of promoters’ shareholding in the bank. On January 30, 2020, the lender and the  RBI had reached an agreement over the stake dilution, as the matter had reached court.

As a consequence to that, Kotak Mahindra Bank had also informed that it was moving towards withdrawing a case it had filed against the RBI in the Bombay High Court over the matter.

According to the agreement reached between the RBI and Kotak Mahindra Bank, promoters’ voting rights in the bank was to be capped at 20 per cent of paid-up voting equity share capital until March 31, 2020.

Afterwards, promoters’ voting rights in the bank were to be capped at 15 per cent from April 1, 2020, onwards and promoters’ shareholding in the bank was supposed to be reduced to 26 per cent within six months from the date of final approval of the RBI.

Thereafter, the promoters will not purchase any further paid-up voting equity shares of the bank till the percentage of their shareholding reaches 15 per cent.

Shareholding of Uday Kotak in the bank stood at 25.82 per cent as on June 30, according to the BSE data. Stock of Kotak Mahindra Bank closed at Rs 1,360.35 apiece on the BSE, up 1.36 per cent from the previous close.

According to RBI’s bank licence norms, a private sector bank’s promoter will need to pare holding to 40 per cent within three years, 20 per cent within 10 years, and to 15 per cent within 15 years.  



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel