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CPPIB gets RBI nod to up stake in Kotak Mahindra Bank upto 10%

 Private sector lender Kotak Mahindra Bank today said the Reserve Bank had granted approval to Canada Pension Plan Investment Board to buy stake in excess of 5 percent and up to 10 percent in the bank.

Private sector lender Kotak Mahindra Bank   today said the Reserve Bank had granted approval to Canada Pension Plan Investment Board to buy stake in excess of 5 percent and up to 10 percent in the bank. "The Reserve Bank of India has informed that the bank that it has granted approval to Canada Pension Plan Investment Board (CPPIB) for acquiring shares in excess of 5 per cent and below 10 per cent of the paid up capital," Kotak Mahindra Bank said in a regulatory filing to stock exchanges. CPPIB has picked up stake of the bank from Japanese multinational Sumitomo Mitsui Banking Corp (SMBC) through open market operation earlier this year. CPPIB bought 1.81 crore shares from SMBC. As per the norms, a foreign investor cannot own more than 10 per cent in the private sector bank. Banks (including foreign banks having branch presence in India) can continue to acquire stake in a bank's equity shares up to 10 per cent of the investee bank's equity capital. However, in case of exceptional circumstances, such as, restructuring of problem/weak banks or in the interest of consolidation in the banking sector, etc., Reserve Bank may permit them a higher level of shareholding.