RBI tells Uday Kotak to lower stake in Kotak Mahindra Bank to 40%

May 28 2014, 12:04 IST
Comments 0
In June 2012, Kotak Mahindra Bank had provided a roadmap to RBI to reduce its stake. In June 2012, Kotak Mahindra Bank had provided a roadmap to RBI to reduce its stake.
SummaryIn June 2012, Kotak Mahindra Bank had provided a roadmap to RBI to reduce its stake.

The RBI on Tuesday told Kotak Mahindra Bank to reduce its promoter shareholding to 40% from the existing 43.58% by September 2014, the private sector lender said in a filing with the BSE.

The promoter holding will be reduced to 30% by December 31, 2016, the filing added. In June 2012, the bank had provided a roadmap to RBI to reduce its stake from then 45.21% to 20% by March 31, 2018. Uday Kotak, the billionaire promoter & managing director of the private sector lender, owns 39.76% of the shares directly and the Kotak Trustee Company where Uday Kotak is the beneficial owner has 3.49% of the shares.

An RBI committee, headed by former Axis Bank chairman PJ Nayak, in a report released recently recommended increasing the continual stake ceiling to 25% from the existing 15%. “It also proposes that for distressed banks, private equity funds — including sovereign wealth funds — be permitted to take a controlling stake of up to 40%,” the report added.

The Nayak committee report on governance on banks also said that private sector banks face troubles due to ownership constraints stipulated by the RBI and said that they could be less rigid.

Ads by Google

More from Corporates & Markets

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...