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RBI Allows Kotak Bank to Buy Up to 9.99% in AU SFB, Federal Bank

9 May 20261 min read
BANKING & FINANCERBI Allows KotakBank to Buy Up to9.99% in AU SFB,Federal Bank9 May 2026safalsetu.com

Why in the news

The central bank permitted a large private lender to take minority holdings in a small finance bank and in another private bank.

Key facts

  • Acquirer: Kotak Mahindra Bank Limited.
  • Targets: AU Small Finance Bank and Federal Bank Limited.
  • Limit: up to 9.99% in each.
  • Approving authority: Reserve Bank of India.
  • Condition: compliance with regulatory norms, investment caps and FEMA rules.

Exam angle

  • Maximum stake allowed: 9.99%.
  • Regulator that cleared it: RBI.
  • Related law: FEMA guidelines.

Test yourself

1. What is the maximum stake Kotak Mahindra Bank may acquire in AU Small Finance Bank and Federal Bank as per the RBI nod?

The approval is for up to 9.99% in each bank.

2. Which authority approved Kotak Mahindra Bank's proposed stakes in AU SFB and Federal Bank?

The Reserve Bank of India gave the approval.

3. Kotak Mahindra Bank's approved stake purchases are subject to which foreign exchange law's guidelines, among others?

The approval is subject to FEMA guidelines and banking norms.

This topic is part of Daily Current Affairs 9 May 2026 (19 topics).

All topics of the dayDay quizMay 2026

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