The Reserve Bank of India has levied an Rs 2-crore penalty on private lender Kotak Mahindra Bank Ltd. for not meeting the regulator’s bank ownership guidelines.
The RBI said in its official website that Kotak Mahindra Bank had been directed to furnish information about details of the shareholding held by its promoters. It had also been asked to submit details of the proposed plan for dilution of promoter shareholding. Subsequently, the bank was directed to convey its commitment to achieving the dilution as per the timelines stipulated, the RBI said.
The tussle between the RBI and Kotak Mahindra Bank started in 2008, five years after the private sector lender had received its license. The banking regulator had written to the bank seeking details of how the bank’s promoter Uday Kotak was going to reduce his stake in the bank to 10 percent or below. Kotak Mahindra Bank took the extreme step of challenging the RBI in court. A decision in the case is still pending.