Kotak Mahindra Bank has got the RBI approval to acquire microlender Sonata Finance for Rs 537 crore.

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

The 100% acquisition received approval of the RBI on 19 October. After the completion of the transaction, Sonata will become a wholly-owned subsidiary of the bank.

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, the lender said in its regulatory filing to the stock exchanges.

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.

In September 2016, Kotak Mahindra had bought BSS Microfinance in an all-cash deal for Rs 139 crore. The acquisition had helped the company in gaining its stronghold in the southern part.