Kotak Mahindra Bank has received approval from the Reserve Bank of India (RBI) to acquire an aggregate holding of up to 9.99% in AU Small Finance Bank, the lender said in an exchange filing on Wednesday.
AU Small Financer bank said in its filing, “AU Small Finance Bank has received RBI’s letter dated May 6, according its approval to Kotak Mahindra Bank (along with its subsidiaries, the funds/schemes managed by KMBL’s subsidiaries, collective referred as “Kota Mahindra Group”) to acquire ‘aggregate holding’ of up to 9.99% of the paid-up share capital or voting rights in AU SFB.”
Why RBI approval was mandatory?
According to RBI norms, any individual or company planning to acquire 5% or more stake or voting rights in a private bank must first seek RBI approval. Investors with 5% or higher shareholding are also classified as “major shareholders” and must annually confirm their “fit and proper” status, including financial integrity and regulatory compliance. The move helps RBI monitor ownership and maintain stability and good governance in the banking sector.
AU Small Finance Bank share price
The share price of AU Small Finance Bank is trading flat in the intraday session today, up 0.83% from the previous close. The stock has surged 13.94% in the past six months. On a year-to-date (YTD) basis, AU Small Finance Bank’s share price has risen 3.45% so far this year.
Kotak Mahindra Bank share price
The share price of Kotak Mahindra Bank has gained 1.17% in the intraday session from the previous close. The stock has fallen 8.86% in the past six months. On a year-to-date (YTD) basis, Kotak Mahindra Bank’s share price has fell 14.28% so far this year.