RBI stays mum on allowing corporate entities to own banks, allows raising of minimum holding

rbi stays mum on allowing corporate entities to own banks allows raising of minimum holding

Sumary of RBI stays mum on allowing corporate entities to own banks, allows raising of minimum holding:

  • MUMBAI: The Reserve Bank of India on Friday has accepted the majority of the recommendations made by the internal working group on the review of ownership guidelines and corporate structure of private sector banks.
  • Among the most important recommendations accepted by the RBI is raising the long-term holding cap of promoters in private sector banks to 26 per cent from 15 per cent currently.
  • Further, under the same recommendation, existing promoters with holdings below the 26 per cent threshold will be allowed to raise their stake.
  • “The promoter, if he/she so desires, can choose to bring down holding to even below 26 per cent, any time after the lock-in period of five years,” the RBI circular said.
  • The regulator has also modified the long-term cap on non-promoter shareholding in banks.
  • The RBI said that long-term non-promoter shareholding will be capped at 10 per cent for natural persons and non-financial entities.
  • However, the same for financial entities will now stand at 15 per cent of the paid-up voting equity share capital.

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