RBI clears Kotak Bank to raise stake up to 9.99% in AU Small Finance, Federal Bank

The Reserve Bank of India (RBI) has cleared ’s proposal to raise its stake in both and , allowing it to hold up to 9.99 per cent in each lender.

The approval, confirmed through separate regulatory filings by and Federal Bank on Thursday, follows an RBI communication dated May 6.

Also Read:

In its disclosure, AU Small Finance Bank said the central bank has permitted (KMBL), along with its subsidiaries and funds managed by them, to expand its investment in the lender within defined limits.

The filing noted that the RBI has given its “approval to Kotak Mahindra Bank Ltd (KMBL) (along with its subsidiaries, the funds/schemes managed by KMBL’s subsidiaries, collectively referred to as ‘Kotak Mahindra Group’) to acquire ‘aggregate holding’ of up to 9.99 per cent of the paid-up share capital or voting rights in AU SFB,”

Federal Bank made a similar disclosure in its BSE filing, stating that it has also received allowing Kotak Mahindra Bank to increase its “aggregate holding” in the bank up to 9.99 per cent of paid-up capital or voting rights.

Also Read:

The move places Kotak in a position to build sizeable in both banks, although it remains within the RBI’s cap that prevents any single entity from crossing the 10 per cent threshold without additional regulatory clearance.

Markets reacted mildly to the development. AU Small Finance Bank shares were trading at Rs 1,034.60, up 0.99 per cent from the previous close on the BSE. Federal Bank shares rose 1.47 per cent to Rs 297.40, while Kotak Mahindra Bank was up 1.12 per cent at Rs 380.40.