The board of directors of Kotak Mahindra Bank (KMB) has passed a resolution permitting the promoters’ voting rights in the bank to be capped at 26 per cent going forward.
This resolution comes in the wake of the Reserve Bank of India (RBI), on November 26, 2021, allowing promoters’ stake in private sector banks in the long run of 15 years to be raised from the current levels of 15 per cent to 26 per cent of the paid-up voting equity share capital of the bank.
Prior to RBI accepting the recommendation of the “Internal Working Group to review extant ownership guidelines and corporate structure for Indian private sector banks”, the shareholding of promoter/s and promoter group/non-operating financial holding company had to be brought down to 30 per cent of the paid-up voting equity capital of the bank within a period of 10 years from the date of commencement of business of the bank.
Further, the promoters’ shareholding had to be diluted to 15 per cent of the paid-up voting equity capital of the bank within a period of 15 years.
By September 2021, the promoter and promoter group had 26 per cent stake in the bank. Uday Kotak, bank’s MD & CEO, is the single largest shareholder with 25.76 per cent stake in the bank.