The Reserve Bank of India has restricted Kotak Mahindra Bank from paying dividend on perpetual non-cumulative preference shares (PNCPS).
The private sector lender, in a regulatory filing, said it has received communication from the RBI on this issue.
The central bank had, on December 4, issued a circular advising banks not to make any dividend payment on equity shares from the profits pertaining to the financial year ended March 31, 2020.
“It is clarified that the above restriction on dividend distribution also applies to PNCPS,” the RBI said in its letter to Kotak Mahindra Bank.
The private sector lender had, in August 2018, said the board had “approved the allotment of 100,00,00,000 PNCPS to eligible investors at the Issue price of ₹5 per PNCPS, aggregating to ₹500 crore pursuant to the issue”.
Subsequently, its the paid-up capital had then increased to ₹1,453.16 crore, and promoter holding was 19.7 per cent of the paid-up capital.
On Thursday, Kotak Mahindra Bank’s scrip closed 1.13 per cent higher at ₹1,903.95 apiece on the BSE.