Kotak Mahindra Bank said on Wednesday that the Reserve Bank of India (RBI) has granted its final approval regarding the dilution of promoters’ shareholding in the bank.
“Further to our intimation dated 30th January 2020, please note that the Reserve Bank of India has granted its final approval vide its letter dated 18th February 2020 in the matter relating to dilution of promoters’ shareholding in the Bank,” Kotak Mahindra Bank said in its stock exchange filing.
On January 30, Kotak Mahindra Bank said that the bank decided to cap the promoters’ voting rights to 15% from April 1 onwards. “The RBI gave its in-principle acceptance for reducing promoters’ shareholding to 26% of the paid-up voting equity share capital of the bank within six months from the date of final approval of the regulator,” Uday Kotak led bank said in its filing last month.
The regulator earlier insisted the Kotak Mahindra Bank promoters to cap their voting rights at 20% by March 2020. Challenging the RBI directive, the private sector lender had filed a writ against the central bank on December 10, 2018 in the Bombay High Court. In an interim order, the RBI had fined the Kotak Mahindra Bank ₹2 crore for violation of its norms.
Kotak will now sell 4% of his stake worth ₹12,500 crore over the next six months.
Shares of Kotak Mahindra Bank rose over 1% on Wednesday to touch ₹1,709.65 in the early trade on Wednesday after the regulator approves its promoters’ shareholding dilution plan.