Mumbai: Kotak Mahindra Bank on Wednesday said the Reserve Bank of India (RBI) has granted final approval to the lender's proposal to dilute promoters' shareholding in the bank.
"Further to our intimation dated 30 January, 2020, please note that the Reserve Bank of India has granted its final approval vide its letter dated 18 February, 2020 in the matter relating to dilution of promoters' shareholding in the Bank," the lender said in a notice to stock exchange.
On 30 January, the private sector lender had said RBI has agreed to its proposal to reduce promoter stake to 26% from the current 29.96% over the next six months. It also said promoter voting rights will be capped at 20% of the paid-up voting share capital until 31 March and will be further capped at 15%, effective 1 April.
Kotak Mahindra Bank had added that promoters will not purchase any further “paid-up voting equity shares" of the bank till promoter shareholding reaches 15%.
With this settlement, the bank has decided to withdraw the writ petition filed in the Bombay high court after RBI struck down its proposal to issue perpetual non-convertible preference shares to comply with promoter shareholding norms.
Promoter Uday Kotak will now sell 4% of his stake worth ₹12,500 crore over the next six months, ending the dispute between the regulator and the bank over dilution of promoter stake.
Shares of Kotak Mahindra bank rose 1% to ₹1,709 after the news came the bank had received final approval from RBI.
