At an extraordinary general meeting, shareholders of the Mumbai-based private bank approved the merger proposal. The exchange ratio has been fixed at 725 shares of Kotak with 1, 000 shares of ING Vysya.

The top management of both banks had made the merger announcement on November 20 last year.

The deal will make Kotak the fourth-largest private bank in the country in terms of total business. The biggest three are ICICI Bank, HDFC Bank and Axis Bank, in that order. The combined banking entity will have a widespread network of 1,214 branches across the country.

At the time, the deal implied a price of Rs 790 for each ING Vysya share, based on the average closing price of Kotak shares during the month to November 19, valuing the deal at around Rs 15,000 crore. That was a 16% per cent premium to a like measure of ING Vysya market price at time of the announcement.

However, the deal still needs regulatory approvals, including those from the Reserve Bank of India and Competition Commission of India. The management of the banks expect the new entity to be operational by April 1, 2015.

The deal will also help Kotak group chairman Uday Kotak reduce the promoter’s stake in Kotak Bank, in line with the road map given by the Reserve Bank of India. After the merger, promoter shareholding in Kotak Bank will come down from 40% to 34%. The RBI had asked Kotak to lower this to 30% by December 2016.