RBI allows 33 per cent FII investment in Kotak Mahindra Bank

15 May 2009

The Reserve Bank of India has allowed foreign institutional investors (FIIs) to buy up to 33 per cent of private sector lender Kotak Mahindra Bank.

Kotak Mahindra had sought RBI approval for raising its foreign fund ownership limit.

''The Reserve Bank of India today notified that under Portfolio Investment Scheme (PIS), foreign institutional investors (FIIs) can now purchase equity shares and convertible debentures of Kotak Mahindra Bank Ltd, through primary markets and stock exchanges in India, '' RBI said in a press release.

''The purchases can be made up to 33 per cent of the paid-up capital of the company, as it has passed resolutions to this effect at its board of directors' and the general body meetings,'' it added.

Raising of FII investment limit to 33 per cent is, however, subject to the condition that the aggregate foreign investment in the bank will not exceed the composite sectoral cap of 74 per cent as prescribed by the government from time to time, the RBI release added.

Foreign funds can hold up to a maximum of 74 per cent of an Indian bank, subject to RBI approval.