Money & Banking

Bombay HC disposes third-party plea in Kotak Bank-RBI case

Our Bureau Mumbai | Updated on July 23, 2019

The Bombay High Court, on Tuesday, disposed of an application filed by a third-party on behalf of deposit holders, who wanted to become party to the writ petition filed by Kotak Mahindra Bank against the Reserve Bank of India on promoter shareholding norms.

The case was heard by a division bench of Justice SJ Kathawalla and Justice Akil Kureshi. The court said there is no locus standi to intervene in the matter, and that the petition does not have any degree of seriousness. Hence, it directed the petitioner to withdraw the case.

The petitioner wanted to become a party to the case alleging collusion between Kotak Mahindra Bank and the RBI, and said there was a large amount of public money involved.

Kotak Mahindra Bank had filed the writ petition in the Bombay High Court on December 10 last year on the Banking Regulation Act, and had sought validation on whether its issuance of Perpetual Non-Convertible Preference Shares (PNCPS) met the regulatory requirements.

Under RBI norms, promoters were expected to dilute their stake in the bank to 20 per cent by December 31, 2018, from close to 30 per cent at present.

The case was adjourned, and the next date of hearing is January 9, 2020.

The RBI had, in June, imposed a ₹2-crore penalty on Kotak Mahindra Bank for not complying with its directions on furnishing information about dilution of promoters’ shareholding.

The Kotak Mahindra Bank scrip gained 2.76 per cent and closed at ₹1,493.70 apiece on the BSE.

Published on July 23, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor