The Bombay High Court on Monday refused to provide interim relief to Kotak Mahindra
Bank in the matter of reducing its promoter holding to below 20 per cent by December 31.
A division Bench headed by Justice B P Dharmadhikari and Justice S V Kotwal directed the Reserve Bank of India (RBI) to file its affidavit by January 17. From the bank's side, senior counsel Darius Khambata requested the Bench to direct the central bank to not take any coercive action against Kotak Mahindra
Bank till the pending hearing and final disposal of the writ petition. The RBI had asked the private lender to reduce promoters' stake to 20 per cent of paid-up capital by December 31 and 15 per cent by March 31, 2020.
The court observed that the RBI was a responsible regulator and it would leave it to the central bank's wisdom to further deliberate on whether the mandated norms were met by the bank within the deadline.
Bank had moved the Bombay High Court on December 10 after the central bank did not accept the reduction of promoter shareholding through an issue of preference shares. In August, the lender issued perpetual non-convertible preference shares, which it said would trim promoters' shareholding from 30.3 per cent to 19.7 per cent. The bank's counsel argued that in such a short period, the only option would be to bring in a foreign investor.
The bank's shares ended Monday's trading session 2.5 per cent lower at Rs 1,223.90 on the BSE.
Disclosure: Entities controlled by the Kotak family have a significant shareholding in Business Standard