RBI Says Yielding to Kotak Plea Would Erode Its Autonomy
- Kotak Mahindra seeks court approval for preference share usage
- There’s a need to make private banks more independent: RBI
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India’s central bank is warning that its authority could be undermined if courts rule against it in a case involving a major private-sector lender.
Kotak Mahindra Bank Ltd.’s legal petition against the Reserve Bank of India’s objection to the method used by the founder to pare his stake in the lender, if granted, would weaken its regulatory authority, according to the RBI. Billionaire founder Uday Kotak, who currently holds 30 percent of the bank, has missed multiple milestones to reduce his stake in the lender, as mandated by the central bank. The RBI required his holding to be cut below 20 percent by December.