Private sector lender Kotak Mahindra Bank on Monday said it has achieved compliance with the RBI norms in respect of dilution of promoter Uday Kotak's shareholding.
The bank was required to bring down the promoter's shareholding to 26 per cent.
"In relation to the matter of dilution of promoters' shareholding in the bank, the bank has achieved compliance with the promoter shareholding reduction requirement set out in the Reserve Bank of India's letters dated January 29, 2020 and February 18, 2020 on August 10, 2020, within the timeline prescribed by the RBI," the bank said in a regulatory filing.
Earlier in February this year, the bank had informed that the RBI had given its approval in relation to dilution of promoters' shareholding in the bank.
Before this, on January 30, 2020, billionaire Uday Kotak-led lender and the banking regulator RBI had reached an agreement over the promoter's stake dilution, as the matter had reached the court.
As a consequence to that, Kotak Mahindra Bank had also informed that it was moving towards withdrawing a case it had filed against the RBI in the Bombay High Court over the matter.
According to the agreement reached between the RBI and Kotak Mahindra Bank, promoters' voting right in the bank was to be capped at 20 per cent of paid-up voting equity share capital until March 31, 2020.
Afterwards, promoters' voting right in the bank was to be capped at 15 per cent from April 1, 2020, onwards and promoters' shareholding in the bank is supposed to be reduced to 26 per cent 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 their shareholding reaches 15 per cent.
Shareholding of Kotak in the bank stood at 25.82 per cent as on June 30, 2020, as per BSE data.
According to RBI's bank licence norms, a private sector bank's promoter will need to pare holding to 40 per cent within three years, 20 per cent within 10 years and to 15 per cent within 15 years.
In 2003, Kotak Mahindra Group's non-banking financial arm Kotak Mahindra Finance received a banking licence from the RBI, becoming the first NBFC to convert into a bank.
Stock of Kotak Mahindra Bank closed at Rs 1360.35 apiece on the BSE, up 1.36 per cent from the previous close.