Kotak Mahindra Bank has received approval from the Reserve Bank of India (RBI) to acquire up to 9.99% stake in both Federal Bank and Jammu and Kashmir Bank, according to separate stock exchange filings by the lenders on Thursday.
Federal Bank said the RBI, through a communication dated May 6, approved Kotak Mahindra Bank's proposal to acquire up to 9.99% of the paid-up share capital or voting rights in the private sector lender.
The approval is subject to compliance with the Banking Regulation Act, 1949, RBI's Commercial Banks, Acquisition and Holding of Shares or Voting Rights Directions, 2025, foreign exchange regulations, SEBI norms and other applicable laws, the bank said in its filing.
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The lender, however, did not specify whether Kotak has already started accumulating shares or if the acquisition would take place through open market purchases, block deals or another route.
In a parallel disclosure, J&K Bank said the RBI had similarly approved Kotak Mahindra Bank's proposal to acquire up to 9.99% stake in the Srinagar-headquartered lender.
The approval, granted via an RBI letter dated May 6, will remain valid for one year. J&K Bank said the approval would automatically lapse if Kotak fails to acquire the proposed stake within the stipulated period.
"Subsequent to such acquisition, if the aggregate holding of Kotak Mahindra Bank Limited falls below 5% at any point of time, prior approval of RBI will be required to increase it to 5% or more,” J&K Bank said in its exchange filing.
The lender also noted that Kotak must ensure its holding does not exceed the 9.99% threshold at any point.
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The RBI approvals are likely to draw investor attention as cross-holdings involving large private sector banks are closely tracked for their strategic implications.
Kotak Mahindra Bank has also received approval from the Reserve Bank of India to acquire up to 9.99% stake in City Union Bank, according to an exchange filing by the lender. The approval allows Kotak Mahindra Bank to acquire up to 9.99% of the paid-up share capital or voting rights in the private sector bank, subject to compliance with banking, foreign exchange and securities market regulations. The RBI approval is valid for one year, within which the acquisition must be completed.
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