ING has sold 46.7 million ordinary shares of Kotak Mahindra Bank at INR782.32 per share giving gross proceeds of €490 million.
The sale reduces ING's stake in Kotak from 6.4% to 3.9%.
ING's remaining stake in Kotak will be subject to a 90 day lock-up following settlement of the transaction which is expected to occur on 4 October.
ING says the transaction will not have a material impact on its profit and loss account, shareholders' equity or capital ratios.
ING obtained its stake in Kotak through the merger of ING Vysya Bank with Kotak Mahindra Bank, which was effective from 1 April 2015.
Following a memorandum of understanding (MoU) signed on 5 June 2015, Kotak and ING will continue to co-operate on cross-border business opportunities and to leverage each other's network's for the benefit of their respective client bases.
ING also remains active in servicing the international business of Indian clients through its global Wholesale Banking franchise.