Kotak Mahindra Bank on Friday said the Reserve Bank has given approval for its Rs 537-crore acquisition of microlender Sonata Finance.

The city-headquartered private sector lender had on February 10 this year announced its intent to acquire Sonata.

"RBI has, vide its letter dated October 19, 2023 received by the Bank on October 19, 2023, conveyed its approval to the Bank, for acquiring 100 per cent of the issued and paid up capital in Sonata," a regulatory filing by Kotak Mahindra Bank said.

The RBI has allowed Kotak to make Sonata as its business correspondent subsidiary and the entity will now be a wholly-owned subsidiary of Kotak Mahindra Bank, it added.

In February, Kotak had said that Sonata had Rs 1,903 crore of assets under management and serviced 9 lakh people as of December 2022.

The acquisition will help the lender deepen presence in the rural and semi-urban pockets in north India, it had said.

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