Upcoming Webinar :Register now for 'ULIP as an investment during economic recovery' powered by Bajaj Allianz

Kotak Mahindra Bank Gets RBI Nod To Cap Promoters’ Voting Rights At 20% Till March

The bank says promoters' voting rights will be capped to 15 percent from April 1 and their shareholding cut to 26 percent within six months of the final nod from RBI.

Jan 30, 2020 / 04:02 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Kotak Mahindra Bank and the Reserve Bank of India (RBI) seem to have reached a truce on the long standing battle to bring down promoter shareholding, and withdrew the writ petition filed by the bank in Bombay High Court against the regulator.

On January 30, Kotak Mahindra Bank wrote to exchanges stating that the banking regulator has agreed ‘in-principle’ to cap promoters’ voting rights to 20 percent of the paid up voting equity share capital until March 31, 2020.

In a letter dated January 29, the RBI has told the bank that the promoters’ voting rights should be brought down to 15 percent of the paid up voting equity share capital from April 1, 2020.

Once the private lender receives the final approval from RBI, it will also have to bring down the promoters’ shareholding down to 26 percent within six months.

As on December 2019, the bank’s Managing Director and Chief Executive Officer Uday Kotak and other promoters held 29.96 percent of the share capital in the bank.

The letter also states that the promoters will not purchase any further paid up voting equity shares of the bank till their stake reduces to 15 percent of the paid up voting equity share capital of the bank or a higher level if permitted by the RBI over time.

Close

“The promoters will be entitled to purchase paid-up voting shares of the bank up to 15 percent of the paid up voting equity share capital or such higher percentage as may be permitted in the future, and exercise voting rights on such shares,” the statement said.

In December 2018, Kotak Mahindra Bank had filed a writ petition in Bombay High Court contesting RBI’s decision that did not allow the lender to bring down promoter stake after issuance of Perpetual Non-Convertible Preference Shares (PNCPS) in August 2018. RBI had said that PNCPS issuance does not meet their promoter dilution requirement.
Moneycontrol News
first published: Jan 30, 2020 04:02 pm

stay updated

Get Daily News on your Browser
Sections