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The Reserve Bank of India has approved Kotak Mahindra Bank to increase its aggregate holding up to 9.99 per cent each in AU Small Finance Bank and Federal Bank. The approval was communicated to both banks this week through separate regulatory filings. The move allows Kotak Mahindra Bank, along with its subsidiaries and schemes managed by group entities, to expand its exposure in the two lenders. Shares of AU Small Finance Bank, Federal Bank and Kotak Mahindra Bank also witnessed gains in trading following the development.
The Reserve Bank of India has approved Kotak Mahindra Bank to increase its aggregate holding up to 9.99 per cent each in AU Small Finance Bank and Federal Bank, according to separate regulatory filings made by the two banks. Advertisement
Both lenders informed stock exchanges that they had received the approval communication from the central bank during the past week. The permission allows Kotak Mahindra Bank, along with its subsidiaries, and schemes or funds managed by its group entities, to acquire up to 9.99 per cent stake or voting rights in the two banks.
In its filing, AU Small Finance Bank stated that the approval covers the entire Kotak Mahindra Group, including subsidiaries and managed schemes, for acquiring aggregate holding of up to 9.99 per cent in the bank’s paid-up share capital or voting rights.
Federal Bank also informed the exchanges that the RBI had granted approval to Kotak Mahindra Bank for acquiring aggregate holding of up to 9.99 per cent in its paid-up share capital or voting rights.
The development comes at a time when banking sector investments and strategic stake acquisitions continue to remain closely watched amid consolidation trends and rising focus on capital strength in the financial sector. Regulatory approvals from the RBI are mandatory for banks and financial institutions crossing specified ownership thresholds in other lenders.
Market reaction remained positive following the announcement. Shares of AU Small Finance Bank were trading at around INR 1,034.60 on the BSE, up nearly 0.99 per cent from the previous close. Federal Bank shares gained about 1.47 per cent to trade near INR 297.40, while Kotak Mahindra Bank stock was also trading higher by around 1.12 per cent.
Kotak Mahindra Bank has remained active in strengthening its financial services presence across segments, while AU Small Finance Bank and Federal Bank have continued expanding their retail and digital banking operations in recent quarters. The RBI approval is expected to provide greater flexibility for Kotak Mahindra Group’s investment exposure in both private sector lenders.
Source PTI
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