Kotak Mahindra Bank on Monday announced that Life Insurance Corporation (LIC) has received approval from the Reserve Bank of India (RBI) to increase its stake in the private lender to nearly 10%.
“Kotak Mahindra Bank has received an intimation from Life Insurance Corporation of India (LIC) stating that the Reserve Bank of India had granted its approval to LIC, for increasing its holding in the bank up to 9.99 per cent of the paid-up equity share capital of the bank,” Kotak said in a regulatory filing on Monday.
The hike in stake by LIC is subject to RBI’s master directions on prior approval for acquisition of shares or voting rights in private sector banks and on ownership in private sector banks. It is also subject to Sebi regulations Foreign Exchange Management Act among others. The approval is valid for a period of one year, Kotak said. As of September 30, 2021, LIC held 4.96 per cent stake in the bank, as per data on BSE.
The RBI norms mandate that every person or an entity who intends to make an acquisition in Private Banks of more than 5% stake, prior approval is needed from the Central Bank.
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LIC has made an application to the Reserve Bank and on the receipt of it, the RBI has sought recommendations on the acquisition from the concerned Bank.
Meanwhile, LIC is aiming to list on domestic bourses by March next year in an initial public offering estimated at $12 billion, set to be the country’s biggest. Kotak Bank shares traded at Rs 2,020 on BSE, up 2.91 per cent from the previous close.
