The Bombay High Court on March 12 will hear Kotak Mahindra Bank Ltd.'s petition against the Reserve Bank of India’s rejection of the lender's proposal to reduce its promoter shareholding, Mint reported Jan. 18.
A division bench of justices granted a request from a central bank lawyer for more time to reply to Kotak Mahindra Bank's petition.
Kotak Mahindra Bank filed a writ petition against the Reserve Bank of India in December 2018 after the central bank rejected the lender's proposal to reduce a promoter's stake through an issue of perpetual nonconvertible preference shares. The central bank had said that the exercise did not meet the dilution requirement.
The Reserve Bank of India had previously ordered the bank to lower its promoter shareholding to 20% of its paid-up capital by Dec. 31, 2018, and further lower to 15% before March 31, 2020.
The bank said in a December 2018 statement that it believes the preference share issue is part of its paid-up capital and that it had met the dilution requirement.