[ By Bobby Anthony ]Kotak Mahindra Bank has stated that the Reserve Bank of India (RBI) has accepted capping of promoters’ voting rights in the bank to 20% of paid-up voting equity share capital until March 31, 2020 and that it is withdrawing its writ petition filed in the Bombay High Court.The bank stated that the RBI has also conveyed its in-principle acceptance to cap promoters'...
Kotak Mahindra Bank has stated that the Reserve Bank of India (RBI) has accepted capping of promoters’ voting rights in the bank to 20% of paid-up voting equity share capital until March 31, 2020 and that it is withdrawing its writ petition filed in the Bombay High Court.
The bank stated that the RBI has also conveyed its in-principle acceptance to cap promoters' voting rights further to 15% of paid-up equity capital from April 1, 2020 onwards to enable Kotak Bank to comply with promoter’s shareholding allowed in the financial sector.
The RBI's bank licensing rules mandate that a private bank's promoter will need to pare holding to 40% within three years, 20% within 10 years and 15% within 15 years.
According to a regulatory filing by Kotak Mahindra Bank, the RBI has directed that promoters’ shareholding in the “bank to be reduced to 26% of paid up equity capital within six months from the date of final approval of the RBI”.
“Thereafter, the promoters will not purchase any further paid-up voting equity shares of the bank till the percentage of promoters’ shareholding reaches 15% of the Bank or such higher percentage as may be permitted by RBI from time to time,” the statement mentioned.
Besides RBI has also stated that, “The promoters will be entitled to purchase paid-up voting equity shares of the bank up to 15% of the paid-up voting equity share capital of the Bank or such higher percentage as may be permitted in the future, and exercise voting rights on such shares”.