At present, foreign investors, including FIIs, FPIs and foreign banks together hold 48.55% in the bank pursuant to its merger with ING Vysya Bank.
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% 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 today.
The Kotak Bank today alloted 13.92 crore shares to the shareholders of ING Vysya completing the merger process, following which the foreign shareholding soared to 48.55%.
"Kotak Mahindra Bank's application for an approval to increase the aggregate ceiling on foreign investment to 55 per cent is currently under the consideration by the FIPB," Kotak Bank said.
In November, Kotak Mahindra Bank had announced the acquisition of mid-sized private sector ING Vysya Bank in an all-share deal worth Rs 15,000 crore.
As part of the deal, 725 equity shares of Rs 5 each (face value) of Kotak Mahindra were to be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Promoters hold 33.91% stake in Kotak Bank.
An inter-governmental panel on April 30 will take up the proposal for raising foreign investment cap in Kotak Mahindra Bank to 55%.
The Reserve Bank, earlier in the day, barred overseas investments in the bank after foreign shareholding in the bank hit the permissible threshold following the merger of Kotak Bank with ING Vysya Bank.
Investments from FIIs, FPIs and foreign banks have reached 48.55% in the merged entity.
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.
The Kotak Bank today alloted 13.92 crore shares to the shareholders of ING Vysya completing the merger process, following which the foreign shareholding soared to 48.55%.
Kotak Mahindra Bank had earlier in the day said that it had sought the approval of the Foreign Investment Promotion Board (FIPB) to increase the aggregate ceiling on foreign investment to 55%.
Out of the 48.55% holding of foreign investors, FIIs hold 33.46%, foreign portfolio investors hold 2.43%, foreign bodies 8.11% and foreign banks 3.60%.
In November, Kotak Mahindra Bank had announced the acquisition of mid-sized private sector ING Vysya Bank in an all-share deal worth Rs 15,000 crore.
As part of the deal, 725 equity shares of Rs 5 each (face value) of Kotak Mahindra were to be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Promoters hold 33.91% stake in Kotak Bank.
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