The Reserve Bank of India (RBI) has granted Kotak Mahindra Bank approval to acquire up to 9.9% of the paid-up share capital of City Union Bank (CUB), a bank established over a century ago. This decision was communicated to CUB on Wednesday and is subject to compliance with various regulations, including the Banking Regulation Act of 1949 and the Foreign Exchange Management Act. Notably, the approval stipulates that Kotak Mahindra Bank will not have a seat on CUB's board, emphasizing a passive investment role. The RBI mandates that any institution exceeding a 5% shareholding must seek its approval, which is a common requirement in the banking sector. Other institutions, such as HDFC Asset Management Company and State Bank of India Asset Management Company, have also held significant stakes in CUB, with 9.4% and 7.8% respectively as of December 2025.