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'RBI relaxation led to Uday Kotak gaining over Rs 23,000 cr'
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SME Times News Bureau | 17 Feb, 2020
The relaxation in norms for private sector banks have resulted in a
staggering windfall gain of Rs 23,300 crore to Uday Kotak, according to
financial analyst Hemendra Hazari.
This major relaxation given to
only one bank, Kotak Mahindra Bank, has seriously undermined the
credibility of the Reserve Bank of India, Hazari said in a blog.
In
a surprise capitulation, the RBI had relaxed the rules for the ceiling
on percentage of shares held by the founders of private banks.
Hazari
claimed that RBI has carved out this exception for just one bank, Kotak
Mahindra Bank, whose founders have been allowed to reduce their stake
to 26 per cent from 30 per cent at present within six months of the
final RBI approval. To date, this has resulted in a staggering gain of
$3.3 billion or Rs 23,300 crore to the founders of Kotak Mahindra Bank
or essentially, Uday Kotak, Hazari said in his blog.
Thereafter, no date has been set by the banking regulator for the stake to be reduced to 15 per cent.
Hazari
said that in contrast, the RBI took action against Bandhan Bank in
September 2018 when the founders did not reduce their stake, restricting
the bank's business by not allowing opening of new branches.
As part of the settlement with the regulator, Kotak Mahindra Bank will withdraw its case against the RBI, Hazari said.
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