RBI asks Kotak Bank to dilute promoters’ stake
The Reserve Bank of India (RBI) has asked Uday Kotak-led Kotak Mahindra Bank to bring down the promoter shareholding to 20% by March 31, 2018 from the current 45.21%. HT reports. What's at stakeindia Updated: Jun 28, 2012 00:10 IST
The Reserve Bank of India (RBI) has asked Uday Kotak-led Kotak Mahindra Bank to bring down the promoter shareholding to 20% by March 31, 2018 from the current 45.21%.
Additionally, the RBI will take a view on further dilution to 10% over two years after that date, depending on new guidelines on issuing banking licences.
The RBI is currently in the process of finalising norms for issuing new banking licences to private business groups."The Reserve Bank of India has advised the Bank that the promoter shareholding, currently at 45.21%, be brought down to 20% by March 31, 2018," said a Kotak Mahindra group spokesperson. "The RBI has also indicated it will take a view on dilution over the next two years thereafter, from 20% to 10% or such other percentage depending upon the prescription of promoter holding in the new bank guidelines."
Follwoing the news, the bank’s scrip closed down 1.3% at R572 on the Bombay Stock Exchange.
According to guidelines, no entity can hold more than 10% in a private sector bank.
The bank’s promoters include Uday Kotak, his associates and a trustee company. At the end of March, 2012 Uday Kotak’s holding in the bank stood at 41.35%.
Kotak, who earlier held 63%, brought down his stake to below 50% after the bank was issued banking licence in 2003.
In the past, the central bank had asked private banks such as Lakshmi Vilas Bank and Bank of Rajasthan (which is now merged with ICICI Bank) to promoter stake.