Money & Banking

Kotak Mahindra deadline: Is RBI waiting for court verdict?

Surabhi Mumbai | Updated on December 31, 2018 Published on December 31, 2018

The RBI wants Kotak Mahindra Bank to lower the promoter holding to less than 20 per cent from the current 30 per cent by Dec-end

RBI may await Bombay HC ruling

With the deadline for dilution of promoter holding in Kotak Mahindra Bank coming to an end on Monday, all eyes are now on the Reserve Bank of India and its next course of action.

However, sources close to the development said the RBI could be awaiting the Bombay High Court’s judgment on the writ petition filed by the private sector lender on the issue.

The High Court has set January 17 as the next date of hearing when the RBI is expected to submit its response.

Investors’ sentiment about the bank’s prospects remained unaffected despite these uncertainties. Shares of Kotak Mahindra Bank rose 0.81 per cent to close at ₹1,254.75 apiece on the BSE.

“The bank believes it is compliant with RBI’s promoter dilution communication. The RBI has not accepted the bank’s contention. The matter in this regard is sub-judice. Hence, the bank cannot offer any comments in this regard,” said Rohit Rao, Chief Communication Officer, Kotak Mahindra Bank, in response to an earlier email questionnaire by BusinessLine.

Kotak Mahindra Bank had, on December 10, filed a writ petition with the Bombay High Court and sought validation on whether its issuance of Perpetual Non-Convertible Preference Shares (PNCPS) in August met the RBI’s requirements for promoters to lower their stakeholding to 20 per cent by December 31 this year.

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

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Published on December 31, 2018
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