Private sector bank Kotak Mahindra Bank on Tuesday informed the Bombay Stock Exchange that the RBI had given approval to the Canada Pension Plan Investment Board (CPPIB) to increase its stake in the bank upto 10 percent.
"The Reserve Bank of India has informed the Bank that it has granted approval to Canada Pension Plan Investment Board (CPPIB) for acquiring shares in excess of 5% and below 10% of the paid up capital of Kotak Mahindra Bank Limited," Kotak Mahindra said in its regulatory filing to the BSE.
Following the news, the Kotak Mahindra stock was trading at Rs. 801.60 at around 12:25 p.m. on Wednesday, up 2.04 percent from its previous close.
According to norms, a foreign investor firm cannot own more than 10 percent in an Indian private sector bank. However, under different circumstances (such as restructuring and consolidation of a bank) the RBI may allow a higher level of shareholding, Press Trust of India reported.
Kotak Mahindra Bank reported a 290 percent spike in its standalone net profit to Rs. 742 crore for the June 2016 quarter (Q1) on account of a 20 percent rise in net interest income and a 41 percent fall in provisioning for bad loans.
The Mumbai-based lender bank's net profit stood at Rs. 190 crore in the corresponding period last year. The bank's total income rose to Rs. 5,120 crore from Rs. 4,583 crore for the June 2015 quarter.
Kotak Mahindra Bank has a network of 1,333 branches as of June 30, 2016. In 2003, Kotak Mahindra Finance Ltd. (KMFL), the group's flagship company, was converted into a commercial bank after receiving the requisite licence from the RBI.
The bank also has interests in mutual fund and insurance businesses.
