In court, Banks' lawyer David Jones, QC, called the prosecution "fundamentally flawed" and asked Judge Eddie Paul to record a plea of not guilty at today's appearance.
"A not guilty plea can be entered and will be entered if your honour will take it,'' he said.
However, Judge Paul said he would follow the procedure and Banks could do that at his plea enquiry hearing at the end of this month.
He also declined an application by Mr Jones to have Banks excused from appearing at his next court date at the end of this month.
As Banks left the dock, a man in the public gallery called out: "nice to see you where you belong, John''.
Outside court, Mr McCready denied an accusation that the charge was frivolous.
"The allegation goes right to the heart of democracy. He's in public office and he's got to follow the rules.''
In a live chat with nz.herald.co.nz today, Dotcom said he now regretted making the $50,000 donation to Banks' failed SuperCity mayoral campaign.
"I have never made a political donation before. I regret the one I made for sure.''
Dotcom told nzherald readers that Banks told him he was "all about tech''.
"He gave me a pitch about how he wants to modernise NZ. I bought it.''
In a decision released last month, Judge Ian Mill said Banks should answer the allegations that relate to two $25,000 donations from Dotcom and his company Megastuff Ltd. A third donation of $15,000 from SkyCity Casino is also included in the allegation.
He said material supplied by Mr McCready showed there were a number of people who could comment on what Banks knew and when.
Mr McCready was found guilty of false tax returns in 2009, and was convicted of blackmail in April.
