Battle lines have been firmly drawn between Kotak Mahindra Bank and the Reserve Bank of India. When the RBI refused to consider Kotak's preference capital route to dilute the promoter's stake, the courts also declined relief. The promoter's stake in the new generation private bank has to drop from 30 to 20 per cent by December 31.
All eyes are on the next hearing in mid-January. As things stand today, the RBI may well take penal action against Kotak for disobeying its directive, but the matter is in court. A few weeks ago, there was speculation of Warren Buffett's Berkshire Hathway acquiring a stake in Kotak. Talks of a merger between Kotak and Axis were in the news for dilution of promoter's stake. There will surely be no dearth of takers for a share of a well run Kotak Bank.
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