Kotak Mahindra Bank has received the Reserve Bank of India’s (RBI) approval to increase its aggregate holding to 9.99% each in AU Small Finance Bank and Federal Bank. Following the announcement, shares of Kotak Mahindra Bank, AU Small Finance Bank, and Federal Bank ended around 1% higher each.

In exchange filings, AU Small Finance Bank and Federal Bank announced that they have received the approval letter from the Reserve Bank of India on May 6.

“AU Small Finance Bank has received RBI’s letter dated May 6, 2026 according its approval to Kotak Mahindra Bank Limited (along with its subsidiaries, the funds/schemes managed by KMBL’s subsidiaries, collective referred as “Kotak Mahindra Group”) to acquire ‘aggregate holding’ of up to 9.99% of the paid-up share capital or voting rights in AU SFB,” AU Small Finance Bank said in a release.

In a separate release, Federal Bank intimated exchange that it has received nod from the RBI on May 06, 2026, that it has accorded its approval to Kotak Mahindra Bank Limited for acquiring “aggregate holding” of up to 9.99% of the paid up share capital or voting rights of the bank subject to the conditions specified therein.

Reacting to the news, shares of AU Small Finance Bank ended 0.93% higher at ₹1,034 on the BSE, with a market capitalisation (m-cap) of ₹77,400 crore. In a similar trend, Federal Bank shares settled 1.36% higher at ₹297.10, taking its m-cap to ₹73,198 crore. Meanwhile, Kotak Mahindra Bank stock closed 1.18% higher at ₹380.65, with its m-cap climbing to ₹3.78 lakh crore.