Kotak Mahindra Bank gains RBI nod to acquire 9.99% stake in AU Small Finance Bank
Kotak Mahindra Bank has secured approval from the Reserve Bank of India (RBI) to buy a stake in AU Small Finance Bank. The deal allows the lender to acquire up to 9.99% of the bank’s shares or voting rights. This move follows AU’s recent transition into a universal bank—the first of its kind in India. AU Small Finance Bank stands as the country’s largest small finance institution. It made history by becoming the first such bank to gain regulatory approval for a shift to universal banking. The institution already attracts investments from major domestic players, including HDFC Mutual Fund, Nippon Life India Asset Management, and SBI Life Insurance.
The RBI’s green light enables Kotak Mahindra Bank, along with its subsidiaries and managed schemes, to hold a combined stake of nearly 10%. Currently, the Kotak Flexicap Fund owns 1.60% of AU Small Finance Bank’s shares, as recorded in the March quarter. With this approval, Kotak Mahindra Bank can expand its presence in AU Small Finance Bank. The acquisition aligns with the latter’s growth as a newly approved universal bank. The deal also reflects ongoing consolidation in India’s financial sector.
