The Reserve Bank of India has approved Kotak Mahindra Bank to acquire up to a 9.99% stake in Federal Bank’s share capital. The approval makes Kotak a potential key institutional shareholder in the Kerala-based lender. Market watchers will now focus on subsequent disclosures to assess how quickly and fully the stake purchase is executed.
AU Small Finance Bank said the RBI has approved Kotak Mahindra Bank to acquire an aggregate holding of up to 9.99% in the Mumbai-headquartered lender. The move follows an exchange filing by AU SFB confirming the regulator’s clearance for the stake acquisition, setting the stage for Kotak’s expansion into small finance banking within defined ownership limits.
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Kotak Mahindra Bank turned in a robust Q4, marked by unexpected margin expansion alongside declining credit costs. While management expects margins to flatten as deposit rates rise, analysts point to potential support from unsecured lending growth, improving CASA deposits, operating leverage, and a rebound in fee income to help sustain strong returns on assets.
Kotak Mahindra Bank stock dropped about 5% after Q4FY26 results, even as the bank delivered a solid quarter. Net profit grew 13.3% year on year and NII rose 8.1%, while asset quality improved with both gross and net NPAs declining. Morgan Stanley stayed bullish with an “Overweight” rating despite the selloff.
Kotak Mahindra Bank reported a 13.3% year-on-year jump in Q4 net profit to Rs 4,026.55 crore for the March quarter of FY26, up from Rs 3,552 crore a year earlier. The result also highlights improving income trends, with NII rising 8% alongside the stronger bottom-line performance.
The Enforcement Directorate carried out searches on 12 premises across Chandigarh, Panchkula, Zirakpur, Dera Bassi and Rajpura in a money laundering probe linked to a municipal fraud case. The action follows an FIR by the ACB, Panchkula, alleging a conspiracy to embezzle about ₹145 crore from civic body accounts, with ED examining related financial trails.
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Kotak Mahindra Bank has issued a customer alert for planned system maintenance on December 21, 2025. Between 3:30 am and 4:30 am IST, mobile banking, net banking, UPI and other payment services will be unavailable. However, ATM withdrawals under Rs 20,000 will not be affected, so customers are urged to plan transactions outside the window.
Kotak Mahindra Bank will require customers to complete mandatory two-factor authentication using OTP or MPIN for selected transactions starting April 22, 2026. The change covers government, statutory, payment gateway, and other merchant payments, with the bank citing added protection for tax-related transactions. Customers are urged to keep their contact details updated to avoid failed verifications.
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