December 10, 2018:

On Monday, Kotak Mahindra Bank said it has moved the Bombay High Court against RBI's decision with respect to the bank reducing promoter holding using preference shares.

In August, Uday Kotak, the founder and promoter of Kotak Mahindra Bank, has pared down his stake in the bank to 19.70% from about 30% following issuance of preference shares.

Within few days, the Reserve Bank said the stake dilution by Kotak does not meet its regulatory norms on the same, something the private sector lender contested.

"We continue to believe that we have met the requirement & will engage with RBI in this behalf," Kotak Mahindra Bank informed the exchanges citing its regulatory filing made on Aug 14.

Bank said that it has since clarified & conveyed to the RBI "our position in relation to perpetual non-cumulative preference shares (PNCPS) being a part of paid up capital & the legal basis on the matter of dilution of shareholding under the Banking Regulation Act."

Further, Kotak Mahindra Bank said it has also shared with RBI the opinions of eminent jurists & senior most legal counsels of the country which confirm its understanding.

"However, we have not heard from RBI on the above matter. Given the milestone of Dec 31, 2018, the bank has been left with no option but to protect its interest.

"By way of abundant caution, the bank has today filed a writ petition with the Bombay High Court to validate the bank's position," it said in the filing made to the stock exchanges on Monday.

Earlier, the RBI had asked promoters of the bank to bring down their stake to 20% by Dec 2018 & 15% by March 2020 in line with the guidelines for new bank licences released four years ago and then under 10 per cent later on.

Shares of Kotak Mahindra Bank were trading down 5.87% down at ₹ 1,207 per scrip on BSE.

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