Shares of Kotak Mahindra Bank jumped over 10 percent, the most in eight years, to Rs 1,345 a piece.

The reaction followed a news reported citing unnamed sources by CNBC-TV18 that Warren Buffett's Berkshire Hathway is looking to buy a 10 percent stake in the bank that is being valued about $4 to $6 billion. The report further said that the Berkshire Hathway is looking to purchase the stake through promoter allotment.

The lender was asked by the Reserve Bank of India (RBI) in August to bring down its promoter Uday Kotak's share to 20 percent from the present 29.73 percent. The deadline to meet the limit ends this month.

The central bank has rejected the means by which the Uday Kotak had lowered his stake. On August 2, he has sold 1 billion preference shares to domestic institutional investors and companies. However, the nonconvertible perpetual noncumulative preference shares (PNCPS) are not a part of the common equity stock held by a bank according to Basel III classification, which means the selling these would not mean a dilution in control, as the RBI ruled.

On August 14, the bank in a statement to the exchanges said, "RBI has today communicated to us that our PNCPS issuance does not meet their promoter holding dilution requirement.