SC yet to decide on foreign stake in local banks
The Supreme Court has declined to pass any interim order on a petition challenging the constitutional validity of the Centre’s decision to permit shareholding of foreign investors up to 74% in banking companies.
By PTI |
NEW DELHI: The Supreme Court has declined to pass any interim order on a petition challenging the constitutional validity of the Centre���s decision to permit shareholding of foreign investors up to 74% in banking companies.
A bench headed by Chief Justice KG Balakrishnan and Justice MK Sharma, however, asked the Bombay High Court to expeditiously dispose off the pending writ petition filed on the issue by Salim Akbarali Nanji, aggrieved shareholder of private sector bank Development Credit Bank (DCB).
Nanji, in his writ petition before the High Court, had challenged the decision of the Reserve Bank of India to grant ���approval letter��� to DCB, permitting the latter to allot preferential shares up to Rs 310 crore to corporate companies and foreign investors. The Reserve Bank of India���s approval letter was in pursuant to the ���Press Note��� No 2 (2004 series)��� issued by the Centre granting such benefits to foreign investors, the petitioner submitted.
The High Court, while admitting the writ petition, however rejected his plea for an interim stay on the allotment move, upon which he filed the special leave petition (SLP) in the apex court. According to the petitioner, bank���s move approved by the Reserve Bank of India will result in the shareholding of the foreign investors rising from 60% to 67%, and as a result, the shareholding of Indian retail investors and minority shareholders in the bank will be reduced from 23% to 19%.
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