MUMBAI: The Reserve Bank today said the recent stake dilution by Kotak Mahindra Bank founder Uday Kotak does not meet its regulatory norms on the same, something the private sector lender contested.
It can be noted that on August 2, Kotak had sold a part of his stake in the lender and bringing down his personal holding to under 20 per cent by issuing perpetual non- cumulative preference shares (PNCPS).
"The RBI today communicated to us that our PNCPS issuance does not meet the promoter holding dilution requirement of the regulator," the fourth largest private sector bank said in a regulatory filing.
The bank, however, maintained that the equity dilution does meet the regulatory requirement.
"We continue to believe that we have met the requirement and will engage with the RBI in this behalf," the bank added. On August 2, Kotak, the founder and promoter of the bank, pared his stake to 19. 70 per cent from about 30 per cent by issuing PNCPS.
The bank has "approved the allotment of 100,00,00,000 PNCPS to eligible investors at the issue price of Rs 5 per PNCPS, aggregating to Rs 500 crore pursuant to the issue.
Kotak's holding in the bank prior to the preference share issuance was 29.74 per cent.
The RBI had earlier asked promoters of the bank to bring down their stake to 20 per cent by December 2018 and 15 per cent by March 2020 in line with the guidelines for new bank licences released four years ago and then under 10 per cent later on.
The Kotak counter closed 0.46 per cent at Rs 1,293.50 on the BSE, on day the benchmark Sensex rallied 0.55 per cent.