Kotak Mahindra Bank, announced that it has executed binding share purchase agreement to acquire 99.49% of equity shares of BSS Microfinance Private (BSS), a non-banking finance company, classified as a NBFC-MFI, from existing shareholders subject to regulatory and other approvals, including Reserve Bank of India.

The acquisition has been approved by the Board of Directors of Kotak Mahindra Bank and is for an aggregate all-cash consideration of Rs. 1.39 billion. As of June 30, 2016, BSS has a networth of approximately Rs. 730 million and microfinance loans of Rs. 4.83 billion in its books. It will be a subsidiary of Kotak after receiving regulatory and other approvals.

Narayan SA, president, Commercial Banking, Kotak Mahindra Bank, said, ''Financial inclusion is one of the imperatives of our country, and this acquisition is a testimony of our commitment to cater to the needs of weaker sections of society in a commercially viable manner. The capabilities and processes required for this customer segment are unique, and cannot be created easily or organically in a short span. BSS is of the right size, culturally compatible with Kotak, and has proven its processes and value systems over a decade.'' ''We will leverage BSS's deep presence in the segment and related experience to ensure that customers' needs are served best and consistent with the past culture,'' added Narayan.

Shares of the bank gained Rs 6.3, or 0.82%, to settle at  Rs 778.75.  The total volume of shares traded  was  71,186 at the BSE (Friday).