The rise in net profit was on the back of strong growth in advances which led to a higher net interest income.

The Bank is strengthening its digital infrastructure to keep the momentum, said a senior official.

The stock declined by 4.43 per cent to Rs 684.40 at BSE.

On the NSE, the scrip fell by 4.6 per cent to Rs 683.80.

The bank witnessed higher provisioning towards non-performing assets, which came mainly from the portfolio of ING Vysya Bank which was merged with Kotak Mahindra on April 1, 2015.

Axis Bank, Kotak Mahindra Bank, YES Bank, HDFC Bank and ICICI Bank were up 1%-5% on the National Stock Exchange (NSE).

Kotak Mahindra Bank had approached FIPB after the Reserve Bank of India barred overseas investments in it as foreign shareholding hit the permissible threshold following the merger with ING Vysya Bank. Investments from foreign institutional investors (FIIs), foreign portfolio investors (FPIs) and foreign banks had reached 48.55% in the merged entity.

The annual general meeting held on Monday approved issuance of “bonus shares in the proportion of one equity share for every equity share of face value Rs 5 held by such person on the record date,” Kotak Mahindra Bank said in a filing to the BSE.

A memorandum of understanding (MoU), signed between the two, covers an array of co-operation in areas such as trade finance, remittances and services related to non-resident Indians, funding to counterparties' corporate relationships, fee-based products, direct banking and digital strategy, and cross-border debt capital markets and mergers and acquisitions.

The company, better known for its cars in the taxi segment, is trying to overcome a “unique social perspective (in India) that a brand which does well in the commercial market, nobody wants to buy for personal usage segment”.