RBI clears Kotak Mahindra Bank to buy up to 9.99% in Federal Bank

Federal Bank on Thursday said the Reserve Bank of India (RBI) has approved Kotak Mahindra Bank to acquire an aggregate holding of up to 9.99% in the private lender, a move that could make Kotak one of Federal Bank’s largest institutional shareholders.

In an exchange filing dated May 7, Federal Bank said it received an intimation from the RBI on May 6 granting approval to Kotak Mahindra Bank for acquiring up to 9.99% of the paid-up share capital or voting rights of the bank.

The approval has been granted subject to compliance with provisions under the Banking Regulation Act, 1949, RBI’s Commercial Banks – Acquisition and Holding of Shares or Voting Rights Directions, 2025, foreign exchange regulations, Sebi rules, and other applicable laws, the bank said.


The filing did not disclose whether Kotak has already begun accumulating shares or whether the proposed acquisition will happen through open market purchases, block deals or another route.

The development is significant as banking sector shareholding approvals from the RBI are closely watched by investors, particularly when one large private sector bank seeks to build a strategic stake in another listed lender.

Federal Bank, headquartered in Kerala, is among India’s leading mid-sized private sector banks with a growing retail, SME, and corporate banking franchise. Kotak Mahindra Bank, meanwhile, is one of India’s largest private lenders by market cap.

Market participants will now closely watch subsequent shareholding disclosures to see how quickly Kotak moves toward the approved 9.99% threshold.