InvestorQ : Why did RBI bar Kotak Mahindra Bank from issuing dividends?
Niti Shenoi made post

Why did RBI bar Kotak Mahindra Bank from issuing dividends?

Answer
image
ishika Banerjee answered.
3 months ago
Follow

RBI has only barred Kotak Bank from paying dividends on perpetual non-cumulative preference shares or PNCPS. These were the shares sold in 2018 to comply with regulatory ceiling on promoter ownership. This restriction only applies to the PNCPS and not to the entire share capital of Kotak Bank.

PNCPS dividends are not assured as they are quasi equity. If dividend is skipped, it cannot be claimed later. Some of the original investors in the Kotak PNCPS included Signet Chemical Corp, Aditya Birla Finance, ICICI Lombard General Insurance and Bajaj Allianz General. Analysts have expressed apprehension that such a move could dilute interest in PNCPS.

2 Views