Canada Pension Plan Investment Board (CPPIB) has received the approval of the Reserve Bank of India (RBI) to increase its stake in Indian private sector lender Kotak Mahindra Bank.

CPPIB is currently the largest foreign portfolio investor (FPI) in the Indian lender with a stake of 4.89%, which it bought in multiple tranches.  Earlier in 2016, CPIIB acquired a stake in the Indian lender from Japan’s Sumitomo Mitsui Banking Corp (SMBC) through open market operation.

The approval from RBI will allow the investor to raise its stake to up to 10%.    

“Kotak Mahindra Bank has informed the exchange that RBI has informed the bank that it has granted approval to CPPIB for acquiring shares in excess of five per cent and below 10 of the paid up capital of the bank,” the bank said in a regulatory filing to the exchanges.

The move is in line with the present rules set out by the RBI, under which a foreign investor cannot own more than 10% in an Indian private sector lender. However, the RBI may allow them to have a higher level of shareholding in case of exceptional circumstances such as restructuring or consolidation of banks.