On Thursday, Kotak Mahindra Bank said that the Reserve Bank of India (RBI) has given the private lender its in-principle approval to cap promoters' voting rights in the bank at 20 percent of paid-up voting equity share capital (PUVESC) till 31 March 2020.
In a stock exchange filing the private lender said, with respect to its proposals relating to dilution of promoters shareholding in the Bank, RBI in its letter dated 29 January 2020 has conveyed its in-principle acceptance for:
- Promoters voting rights in the Bank to be capped to 20 percent of paid-up voting equity share capital (PUVESC) until 31 March 2020
- Promoters' voting rights in the Bank to be capped to 15 percent of PUVESC from 1 April 2020 onwards
- Promoters' shareholding in the Bank to be reduced to 26% of PUVESC of the Bank within six monthsfrom the date of final approval from RBI
- Thereafter, the promoters will not purchase any further paid up voting equity shares' of Kotak Mahindra Bank till the percentage of promoters' shareholding reaches 15 percent of PUVESC of the Bank or such higher percentage as may be permitted by RBI from time to time
- The promoters will be entitled to purchase paid-up voting equity shares of the Bank up to 15 perrcent of the PUVESC of the Bank or such higher percentage as may be permitted in the future, and exercise voting rights on such shares.
It further said that its Board has resolved to abide by the regulations cited.
"The Bank is withdrawing Writ Petition No. 3542 of 2018 filed by it in the Hon'ble High Court of Bombay," it added as the petition was filed against RBI's licencing rules.