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The Bombay High court has postponed the hearing in the family feud between YES Bank promoters over the composition of the board to 5th July.
The bank today informed the court that its board had rejected the application of Shagun Kapur Gogia, daughter of deceased co-founder Ashok Kapur, to be on its board.
YES Bank's lawyer has also informed the court that the ongoing dispute is affecting the functioning of the bank.
Meanwhile, the appointment of the three directors approved by the board will stay suspended till further court orders.
The high-profile dispute between the warring promoters of the bank took a fresh turn over the weekend when Gogia’s mother Madhu Kapur, who holds 12% stake in the company, was informed through a letter that the board had unanimously agreed not to accept her recommendation of appointing her daughter on the bank’s board.
Sources familiar with the developments said the bank’s board reviewed the Reserve Bank of India's (RBI) guidelines and relevant laws while discussing Gogia's appointment.
It also evaluated the past and present composition of the YES Bank board and current composition of the boards of some of the other private banks in the country.
The letter said Rana Kapoor, co-founder, managing director and chief executive officer of YES Bank, voluntarily recused himself when the agenda of Gogia's appointment was considered in the nominations and governance committee meetings and subsequently in the board meeting.
The bank had said on Friday it would induct three of its top management executives on the board to reinforce its positioning as the 'Professionals Bank of India'.
Rajat Monga (senior group president for financial markets and chief financial officer), Sanjay Palve (senior group president and senior managing director for corporate finance) and Pralay Mondal (senior group president for branch, retail and business banking) will join the board subject to RBI's and shareholders' approval.
