The Bombay High Court on Monday refused to stay regulatory proceedings against Kotak Mahindra Bank in the event of its failure to meet the Reserve Bank of India\u2019s (RBI) December 31 deadline on shareholding norms for private banks. On December 10, the bank filed a writ petition in the Bombay High Court against the RBI decision to overrule an issue of perpetual non-convertible preference shares (PNCPS) as a valid means of reducing promoter Uday Kotak\u2019s shareholding in the bank. It is reported that the next hearing in the matter will be held on January 17. Following reports of the court\u2019s decision, the bank\u2019s shares fell as much as 3.7% intraday before ending 2.7% lower at Rs 1,223 apiece. On August 2, the bank announced completion of the PNCPS issue on that day resulting in dilution of its promoter stake to 19.7% of paid-up capital. As per the central bank rules, the bank must reduce its promoter shareholding to 20% by December 31, 2018 and 15% by March 31, 2020. The RBI took issue with the PNCPS route for stake dilution and on August 14 the bank communicated as much to the exchanges. \u201cWe continue to believe that we have met the requirement and will engage with the RBI in this behalf," it had added. Notifying the stock exchanges of its decision to move court, Kotak Mahindra Bank on December 14 said it had since clarified and conveyed to the RBI its position in relation to PNCPS being a part of paid-up capital and the legal basis on the matter of dilution of shareholding under the Banking Regulation Act. According to the bank, it had also shared with the central bank the opinions of eminent jurists and senior legal counsels of the country, which confirm its understanding of the rules. As they had not heard from the RBI on the matter and given the December 31 deadline, the bank had filed the writ petition \u201cby way of abundant caution\u201d.