Kotak Mahindra Bank told to cut promoter stake to 20% in 6 years

Mumbai: The Reserve Bank of India (RBI) has asked private sector lender Kotak Mahindra Bank Ltd to reduce the stake of the promoters in about six years.

“RBI has advised Kotak Mahindra Bank that the promoter shareholding, currently at 45.21%, be brought down to 20% by March 31, 2018,” a spokesperson of the bank said in an emailed press release.

The promoters include Uday Kotak, his associates and a trustee company. In March, Uday Kotak alone owned a little over 41% of the bank.

Promoters originally had a 63% shareholding when the bank began operations in 2003.

According to the spokesperson, after bringing down the stake to 20%, RBI will take a view on dilution to 10% over the next two years depending on the new bank guidelines.

The apex bank is currently in the process of finalizing norms to issue new licences to private business groups.

RBI has asked some of the smaller banks to reduce the promoter stake to 10% gradually.

These include Catholic Syrian Bank Ltd, Development Credit Bank Ltd and IndusInd Bank Ltd.

dinesh.N@livemint.com