The Reserve Bank of India or RBI has asked the promoters of Kotak Mahindra Bank to cut their stake in the bank to ten percent from the present 45 percent by 2016, reports said.
This regulatory directive is in keeping with the guidelines for entry of new private sector banks. The guidelines require promoters to gradually bring down their stake to ten per cent.
As at the end of December 2011, promoter holding in Kotak Mahindra Bank was at 45.40 percent, compared to 63 percent in 2003, when it became a bank.
Promoters of private sector banks such as Kotak Mahindra bank, Yes Bank and Development Credit Bank have been getting regulatory exemptions every year to hold higher stakes.
“We would like to confirm that the long-term objective of the bank is to broad base the shareholding in a non-disruptive manner, keeping in mind the interests of all stakeholders…..The bank continues to be committed to following the statutory directions of the RBI,” a Kotak Bank spokesperson said.
Source: Nasdaq