Uday Kotak's Wealth Grows Amid Tussle With RBI: Report

Banking tycoon Uday Kotak's wealth has increased three-times in the last five years even as he has been locked in a legal case with the Reserve bank of India (RBI) over reduction in promoter shares in Kotak Mahindra Bank..The founder of Mumbai-based Kotak Mahindra Bank has seen his wealth nearly triple since March 2014, when the RBI said he failed to meet the first of its successive milestones to reduce his stake in the bank, a Bloomberg report said. .Currently, his wealth stands at $11.4 billion, according to the Bloomberg Billionaires Index, mainly due to share price gains that have increased the value of his holding in Kotak Mahindra Bank..Mr Kotak currently holds 30 per cent stake in bank..The latest RBI deadline for Mr Kotak to reduce his holding below 20 per cent was by the end of last year. It is part of the regulator's efforts to reduce the influence of founding shareholders in Indian banks..The bank is contesting that legally, arguing that a sale of preference shares last year which raised Rs 500 crore complies with the RBI regulations..The latest hearing in the issue took place on Tuesday and the matter has been adjourned till April 1..The bank's counsel said that the issue was about concentration of control and suggested that promoters would not vote in excess of 20 per cent till May 2020. However, the suggestion was not accepted by Justice AS Oka..The RBI said in a petition to the high court that if the relief sought by Kotak Mahindra Bank is approved, it would permit the petitioners and others to become regulators of their own selves, thereby diluting the central bank's authority..In the last few years, despite the conflict over regulatory matters, Kotak Mahindra Bank shares have performed better than most other banks largely due to the the bank's ability to manage its asset quality better than most of its peers.."Uday Kotak seems to delay implementation of the shareholding rules as much as he can, adding billions to his wealth in the process," the Bloomberg report quoted independent analyst Hemindra Hazari as saying.."Had he followed the timelines, he would have had to sell his shares for far less a price than today," he added..In a similar matter, the central bank last year ordered Bandhan Bank not to raise its CEO Chandra Shekhar Ghosh's salary and restricted the lender from opening new branches without its approval after the bank failed to meet shareholding requirements..According to analysts, shareholders would lose out if Uday Kotak is forced to cut his stake..On Tuesday, shares of the bank on the BSE closed at Rs 1,262.60 per share, higher by Rs 13.75 or 1.10 per cent from its previous close.

Uday Kotak's Wealth Grows Amid Tussle With RBI: Report

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP