Money & Banking

Dilution of promoter stake: Bombay High Court to hear Kotak Mahindra plea today

Surabhi Mumbai | Updated on January 16, 2019 Published on January 16, 2019

Uday Kotak, Head of Kotak Mahindra Bank   -  File photo

The Bombay High Court is likely to resume hearing on Thursday the writ petition filed by private sector lender Kotak Mahindra Bank against the Reserve Bank of India on the issue of dilution of promoter shareholding norms.

RBI response

The two-judge bench of the Bombay High Court, comprising Justices BP Dharmadhikari and Sarang V Kotwal, had asked the RBI to file its response before January 17.

The bench had taken up the matter on December 17, and at the time had refused to give any interim relief to Kotak Mahindra Bank on the RBI’s December 31 deadline to lower the promoter stake to the mandated 20 per cent.

However, the regulator has not taken any action against the private sector lender, and expectations are that it will await the decision of the Bombay High Court on the writ petition. On December 10, Kotak Mahindra Bank had filed a writ petition with the Bombay High Court on the Banking Regulation Act and had sought validation on whether its issuance of Perpetual Non-Convertible Preference Shares (PNCPS) in August meets the requirements of lowering the promoter stakeholding set by the RBI.

The RBI had earlier said it did not meet its requirements to lower the promoter holding to less than 20 per cent from the current 30 per cent.

Promoter group stake

As on September 30, the promoter group held 30.02 per cent stake in Kotak Mahindra Bank, of which, Uday Kotak, Managing Director and CEO of the lender, held 29.73 per cent stake.

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Published on January 16, 2019
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