The promoters of Kotak Mahindra Bank will bring down their equity by 11 per cent to 49 per cent by 2004 in order to comply with the Reserve Bank of India's stipulations.

"We will bring down the promoters (and families) stake to 49 per cent from the present 60 per cent after one year," the bank's executive vice chairman Uday Kotak told reporters in New Delhi.

Asked how the offloading would be done, he said the bank was exploring various options.

"The board will consider mergers, public offers and private placement. It will have to be worked out," he said.

Reserve Bank of India had recently relaxed the limit of promoters holding in the banks to 49 per cent from the earlier 40 per cent.

Asked whether the bank was in favour of acquisitions, he said: "We are open to these ideas. But no concrete plans are in the store."

Kotak said the focus of the bank would be on the retail segment and might come out with credit cards after 2-3 years, once they stabilised with the banking, which offered debit cards free of cost of opening an account.

Kotak Mahindra Bank, from the stable of Rs 1,400 crore (Rs 14 billion) Kotak Group with a mere 0.01 per cent net NPA (non-performing asset), would open 75 branches across the country within three years from the present two branches in Delhi and Mumbai.

He said of the proposed 75 branches, the bank would focus more in Delhi and Mumbai and 25 branches would be opened by March 2004.

Elaborating on the plans to reach out to "mass affluent" class, Kotak said the bank customers would have access to the entire visa network of 4,500 ATMs in India and 800,000 ATMs across the globe.

He said the customers would also have access to over 800 ATMs free of cost through a sharing agreement with UTI Bank.

On its retail plans, he said very soon the bank would embark on housing and personal loan segments in a big way.

The bank, which started with 200,000 customers on the first day itself, had a capital adequacy ratio of 28 per cent as on March 31, 2002, way higher than the RBI stipulated 9 per cent.

Asked on the decision to convert the finance company into a bank, he said it was natural for them as they were in the business of providing financial services for the last 20 years and wanted to bring all the product offering under one single umbrella of Kotak Mahindra Bank.