RBI asks Kotak Mahindra Bank to reduce promoter stake to 40% by Sep

The Reserve Bank of India has directed Kotak Mahindra Bank to reduce its promoter shareholding to 40 per cent by September 30 this year and then to 30 per cent by December 31, 2016, the private lender informed the stock exchanges.

At present, promoter shareholding is 43.58 per cent. In this, 40.09 per cent is owned by individuals and a Hindu Undivided Family; another 3.49 per cent is held by the promoter through corporate bodies.

Earlier, in June 2012, the bank had suggested a road map to RBI to reduce the stake from 45.21 per cent then to 20 per cent by March 31, 2018.

RBI had then said it would take a view on the dilution over the next two years, depending on the prescription of promoter holding in the new bank guidelines.

Currently, 39.76 per cent is directly owned by Uday Kotak, vice-chairman and managing director. Recently, an RBI-appointed committee headed by former Axis Bank Chairman P J Nayak recommended that promoters be allowed to hold up to 25 per cent stake in private sector banks as against the present norm of 10 per cent.

The norm on new bank licences has kept the maximum promoter shareholding at 15 per cent.

According to the Nayak committee, since a separate category of investors, namely, authorised banks investors, comprising all diversified funds discretionally managed, are proposed to have up to 20 per cent stake, promoters should be allowed more.

Except for ICICI Bank, the promoter shareholding in all private sector lenders was above the limit as on December 2013.

Most private banks had furnished a road map to the banking regulator on lowering these holdings.

Kotak Mahindra Group