In a letter to the Sterling group, RBI said the TMB board, which met in early January, had decided not to make a reference to the apex bank on the matter making the RBI unable to decide on the transfer of shares.

Top sources in the apex bank said RBI would consider the request for transfer of shares by Sterling "once the TMB board makes a reference for acknowledgment by the RBI".

However, financial director of Sterling group, A Subramaniam refused to comment on the ongoing tussle.

Nadar community, which holds a minority stake of 25 per cent in TMB, had been refusing the transfer of shares to the Shivshankaran-owned Sterling group fearing loss of management control of the bank from theNadars.

Sterling group owns 67 per cent stake in TMB following purchase of shares from the Essar group three years ago. However, the RBI acknowledgment, which is mandatory for approval of management control, has been pending.

According to banking sources, the present TMB board cannot decide on the matter as the Sterling group, with its overwhelming stakes in the bank, can easily fill-in their representatives in the board.

Referring to the possibility of off-loading Sterling group's stake, company sources said there should be an independent evaluation by a leading merchant banker to arrive at a fair and reasonable price for the 67 per cent stake.

Sources also indicated that the group would consider selling the stake to a third party, if a settlement was not reached soon.

Nadar Mahajana Share Investors Forum chairman D Ramachandra Adityan, in a statement in Chennai early this week, said the forum was ready to buy the Sterling group's shares at a "fair and reasonable price".

However, as the Nadarcommunity did not have the funds to acquire the shares, the only way out would be to ask financial institutions like IDBI, ICICI and even state financial institutions to buy the Sterling group's shares, banking industry sources said.

Even the 25 per cent stake in TMB held by the Nadars are split between several individuals, they pointed out.

With Sterling group controlling the majority stakes, the TMB has not conducted its annual general meeting (AGM) for the last three years, sources said.