The Reserve Bank of India has allowed foreign institutional investors (FIIs) to buy up to 33 per cent of private sector lender Kotak Mahindra Bank.

Kotak Mahindra had sought RBI approval for raising its foreign fund ownership limit.

''The Reserve Bank of India today notified that under Portfolio Investment Scheme (PIS), foreign institutional investors (FIIs) can now purchase equity shares and convertible debentures of Kotak Mahindra Bank Ltd, through primary markets and stock exchanges in India, '' RBI said in a press release.

''The purchases can be made up to 33 per cent of the paid-up capital of the company, as it has passed resolutions to this effect at its board of directors' and the general body meetings,'' it added.

Raising of FII investment limit to 33 per cent is, however, subject to the condition that the aggregate foreign investment in the bank will not exceed the composite sectoral cap of 74 per cent as prescribed by the government from time to time, the RBI release added.

Foreign funds can hold up to a maximum of 74 per cent of an Indian bank, subject to RBI approval.

Kotak Mahindra Bank had reported a 48 per cent year-on-year rise in its stand-alone fourth quarter profit after tax (PAT) at Rs103 crore against Rs69 crore in the same quarter in the previous fiscal.

For fiscal 2008-09, its PAT stood at Rs276 crore (FY08 – Rs294 crore).
Net interest income of the bank for FY09 is up 24 per cent at Rs1,519 crore from Rs1,226 crore in FY08.

The bank had 217 full-fledged bank branches (178 branches as on 31 March 2008) across 126 locations and 387 ATMs as of 31 March 2009.

Loans restructured and considered as standard as at 31 March 2009 was Rs 56 crore.

The bank has deposits of Rs15,645 crore as of 31 March 2009. CASA deposits comprised 32 per cent of total deposits (26 per cent as f 31 March 2008).

Capital adequacy ratio of the Bank as of 31 March 2009 was 19.9 per cent (18.7 per cent as of 31 March 2008). Tier I ratio was 16.0 per cent. Consolidated capital adequacy ratio as on 31 March 2009 was 22.8 per cent (31 March 2008 – 20.2 per cent).

The board has declared a dividend of 7.5 per cent for 2008-09 (7.5 per cent for 2007-08).