Promoter stake: RBI fines Kotak Bank Rs 2 crore
TNN | Updated: Jun 8, 2019, 13:27 ISTHighlights
- RBI imposed penalty for non-compliance with the directions issued to dilute promoter holding by December 2018
- The RBI said that the penalty was imposed after considering the reply received from the bank, submissions made by it during the personal hearing and the documents submitted by it
Uday Kotak (File photo) MUMBAI: The RBI has imposed a Rs 2-crore penalty on the Uday Kotak-led Kotak Mahindra Bank for non-compliance with the directions issued to dilute promoter holding by December 2018.
The RBI said that Kotak Bank was directed to furnish information about details of the shareholding held by its promoters and to submit details of the proposed course of action of the bank for complying with the permitted timeline for dilution of promoter shareholding.
“Subsequently, the bank was directed to convey its commitment to achieve the dilution as per the timelines stipulated. However, the bank failed to comply with the said directions and a show-cause notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said directions,” the RBI said.
The RBI said that the penalty was imposed after considering the reply received from the bank, submissions made by it during the personal hearing and the documents submitted by it.
The RBI had directed Kotak Mahindra Bank in August 2018 to dilute promoter’s holding from around 30% to 20% of its paid-up voting equity capital by December 31, 2018, and to 15% by March 31, 2020. Kotak Bank, however, petitioned the high court against RBI’s directive stating that its issue of perpetual preferential shares in effect diluted the promoter holding. The Bombay high court had last month adjourned the hearing to January 2020, citing a paucity of time.
The RBI said that Kotak Bank was directed to furnish information about details of the shareholding held by its promoters and to submit details of the proposed course of action of the bank for complying with the permitted timeline for dilution of promoter shareholding.
“Subsequently, the bank was directed to convey its commitment to achieve the dilution as per the timelines stipulated. However, the bank failed to comply with the said directions and a show-cause notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said directions,” the RBI said.
The RBI said that the penalty was imposed after considering the reply received from the bank, submissions made by it during the personal hearing and the documents submitted by it.
The RBI had directed Kotak Mahindra Bank in August 2018 to dilute promoter’s holding from around 30% to 20% of its paid-up voting equity capital by December 31, 2018, and to 15% by March 31, 2020. Kotak Bank, however, petitioned the high court against RBI’s directive stating that its issue of perpetual preferential shares in effect diluted the promoter holding. The Bombay high court had last month adjourned the hearing to January 2020, citing a paucity of time.
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