The Reserve Bank has allowed overseas investors to buy stake in Kotak Mahindra Bank as the foreign shareholding in the private bank went below the prescribed limit.

The aggregate shareholdings of foreign investors through global depository receipts, FDI, FII and NRIs, among others, in Kotak Mahindra Bank has gone below the prescribed limit stipulated, RBI said in a release.

"Hence the restrictions placed on the purchase of shares of the above bank are withdrawn with immediate effect", RBI said in a release. As per data available on BSE, the promoter held 33.73 per cent stake in the Bank as of December 2015. Public shareholding was at 66.27 per cent at December-end.

The separate data regarding foreign shareholding was not provided. Under the existing rules, foreign direct investment limit in private sector banks is at 74 per cent.

However, government is considering to increase the foreign direct investment (FDI) limit in private banks to 100 per cent.

FIIs, NRIs and PIOs (Persons of Indian Origins) can invest in primary and secondary capital markets in India through PIS.

RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis and has fixed the cut-off points two percentage points lower than the actual ceiling.

PTI