Kotak Bank seeks FIPB nod to hike foreign holding to 55%
Private sector Kotak Mahindra Bank is seeking FIPB approval to hike foreign investment in the entity to 55 per cent as the RBI has restricted more investments after they hit the permissible threshold.
Foreign investors can acquire up to 49 per cent stake in Indian lenders through automatic route, but beyond that requires the nod of FIPB, headed by the Economic Affairs Secretary in the Finance Ministry.
At present, foreign investors, including FIIs, FPIs and foreign banks together hold 48.55 per cent in the bank pursuant to its merger with ING Vysya Bank. Reserve Bank has disallowed further foreign investments as “the aggregate foreign shareholding in Kotak Mahindra Bank has reached the threshold limit,” the central bank said in a statement on Tuesday. The Kotak Bank alloted 13.92 crore shares to the shareholders of ING Vysya completing the merger process, following which the foreign shareholding soared to 48.55 per cent.