An inter-governmental panel on April 30 will take up the proposal for raising foreign investment cap in Kotak Mahindra Bank to 55 per cent.
The Reserve Bank, earlier in the day, barred overseas investments in the bank after foreign shareholding in the bank hit the permissible threshold following the merger of Kotak Bank with ING Vysya Bank.
Investments from FIIs, FPIs and foreign banks have reached 48.55 per cent in the merged entity.
Foreign investors can acquire up to 49 per cent stake in Indian lenders through automatic route, but beyond that requires the nod of FIPB, headed by the Economic Affairs Secretary in the Finance Ministry.
The Kotak Bank today alloted 13.92 crore shares to the shareholders of ING Vysya completing the merger process, following which the foreign shareholding soared to 48.55 per cent.
Kotak Mahindra Bank had earlier in the day said that it had sought the approval of the Foreign Investment Promotion Board (FIPB) to increase the aggregate ceiling on foreign investment to 55 per cent.
Out of the 48.55 per cent holding of foreign investors, FIIs hold 33.46 per cent, foreign portfolio investors hold 2.43 per cent, foreign bodies 8.11 per cent and foreign banks 3.60 per cent.
In November, Kotak Mahindra Bank had announced the acquisition of mid-sized private sector ING Vysya Bank in an all-share deal worth Rs 15,000 crore.
As part of the deal, 725 equity shares of Rs 5 each (face value) of Kotak Mahindra were to be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Promoters hold 33.91 per cent stake in Kotak Bank.
