Demonetisation drive impacts share pledge invocation

However, the ongoing restriction on the use of old notes has put promoters in a spot

The demonetisation drive has impacted a few promoters who had pledged their shares in physical form. These promoters are finding it difficult to invoke their pledged shares, as they moved to cash just ahead of demonetisation. Earlier, it was possible for them to revoke their physical shares by paying cash or depositing it in the lender’s account. However, the ongoing restriction on the use of old notes has put them in a spot, say market observes. According to sources, a few plan to take up the issue with the Securities and Exchange Board of India (Sebi) or the Reserve Bank of India on an informal basis. Although, Sebi has made dematerialisation of shares compulsory, there are a few promoters who continue to have physical share certificates.