InvestorQ : Why RBI is not ready to extend the deadline for Kotak bank?
Radhika Arya made post

Why RBI is not ready to extend the deadline for Kotak bank?

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Tisha Malhotra answered.
3 years ago
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RBI has already extended deadline many time previously for the same reason, that is to cut down the promoters’ stake in Kotak bank. The dilution of promoter’s stake is Kotak bank is not a matter of today but a to-and-fro of letters from each other since 2008. From almost a decade the Kotak Bank has given a roadmap plan to RBI to decrease the promoter’s stake but most of the time it asked to extend the deadline with some or other reasons and RBI did extended. However, the company is further pleading for more extension in deadline, which is why RBI is now not extending the deadline date.

RBI directed Bank to cut their Promoter’s stake so to avoid concentration of control in the hands of few people. To comply the promoter stake rules, Kotak bank proposed to issue perpetual non-convertible preference shares, which was rejected by RBI and so Kotak Bank moved to Court to seek stay on RBI directive.

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