The Bombay High Court has directed the Reserve Bank of India (RBI) to take “appropriate decision in connection with the acknowledgement of transfer of shares” held by Ramesh Vangal-led overseas investors and a few resident investors in Tamilnad Mercantile Bank (TMB) by February 28, 2011. They together hold 24.89 per cent of shares in TMB.
In its order dated October 14, the Bombay High Court also held that no general body meeting of TMB should be called for till the RBI took an appropriate decision in the share transfer issue. The Court further directed that ``no major policy decision may be taken in connection with the affairs of the bank (TMB) except incurring expenditure for the purpose of conducting regular business transactions.''
The Bombay High Court asked the RBI to pass “appropriate order considering the policy and guidelines on this behalf.” It went on to say that “any circular and/or guideline framed by the RBI may also be taken into consideration and appropriate decision may be taken in accordance with law.” While dismissing a batch of petitions filed against an RBI order dated October 12, 2009, the Bombay High Court, however, instructed the apex bank to “take an objective decision as per material available on record and may not be solely guided by whatever prima facie observations made in the order dated October 12, 2009.” Now that the Bombay High Court has put the ball into RBI court, banking industry sources are hoping that the apex bank will come out with a decisive view on the TMB imbroglio, clearing policy ambiguities.
