The Hindu : Business : IFC to invest $45m in Kotak Mahindra Bank

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Thursday, Mar 22, 2007
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IFC to invest $45m in Kotak Mahindra Bank

MUMBAI: IFC, the private sector arm of the World Bank Group, will invest $45 million in Upper Tier-II subordinated bonds of Kotak Mahindra Bank Ltd. The bonds will have a final maturity of 15 years.

Uday Koak, Executive Vice-Chairman and Managing Director, Kotak Mahindra Bank, said, "IFC's quick response to the Reserve Bank of India's Upper Tier-II guidelines will help further improve Kotak Mahindra Bank's capital adequacy and diversify its funding sources."

Iyad Malas, Director, IFC South Asia, said, "IFC's investment in Kotak Mahindra Bank supports our larger goal of developing and strengthening the financial sector in India. Our support will help the bank leverage its improved capitalisation, enhancing credit distribution to its clients, especially the SME sector."

Third subscription

This is IFC's third subscription to Upper Tier-II subordinated bonds issued bilaterally by Indian private sector banks, following transactions with HDFC Bank and ICICI Bank in recent months. In 2003, IFC provided a six-year senior loan of $22 million to Kotak Mahindra Bank, according to a release.

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