HDFC Bank and ICICI Bank are in a tussle regarding the ownership of client shares that Karvy Stock Broking Ltd had pledged with them, reported livemint.

The case, the report said, will now require Securities Appellate Tribunal (SAT) to take a decision as both lenders seek to recover Rs 1,000 crore they had lent to Karvy.

The report added that in Tuesday's hearing, the banks sought to terminate a Sebi order which prevented them from accessing these shares. The lenders also wanted the SAT to set aside the National Securities Depository Ltd’s (NSDL) transfer of these securities to client accounts, the report said.

According to the report, the banks have alleged that Sebi and NSDL did not respond to their requests on the transfer of securities to clients’ accounts, which would leave them with almost no shares.

Last month, Sebi banned Karvy Stock Broking from taking new clients and executing trades for existing customers over defaults worth Rs 2,000 crore and allegedly misappropriating money to fund its real estate arm, Karvy Realty.

According to the regulator, Karvy violated norms, including transferring client shares to itself and pledging client shares to raise money, which is diverted to its real estate arm.