Kotak Mahindra Bank Ltd.

Foreign Investment Promotion Board (FIPB) has deferred Kotak Mahindra Bank’s proposal for hiking the foreign investment limit in the bank from 48% to 55% for the second time. The proposal was postponed as comments from the Department of Financial Services (DFS) regarding the impact of the proposal on downstream investment by the bank in the insurance venture did not come.

However, if the FIPB permits Kotak to raise the FII limit to 55%, an increase in the foreign limit to over 50% would automatically qualify the bank as ‘foreign-owned’, resulting in a dilemma of how to treat the bank’s stake in its insurance business.

The bank posted a rise of 29.46% in its net profit at Rs 527.14 crore for the quarter ended March 31, 2015 as compared to Rs 407.18 crore for the same quarter in the previous year. Total income of the bank increased by 27.27% at Rs 3249.08 crore for quarter under review as compared to Rs 2552.96 crore for the quarter ended March 31, 2014.