Private bank ownership: RBI accepts recommendations of internal working group
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The Reserve Bank of India has accepted 21, some with partial modifications, out of the 33 recommendations of the Internal Working Group set up to review the extant guidelines on ownership and corporate structure for Indian private sector banks.
The key recommendations accepted include that the cap on promoters’ stake in long run of 15 years may be raised from the current levels of 15 per cent to 26 per cent of the paid-up voting equity share capital of the bank.
“This stipulation should be uniform for all types of promoters and would not mean that promoters, who have already diluted their holdings to below 26 per cent, will not be permitted to raise it to 26 per cent of the paid-up voting equity share capital of the bank,” the RBI said.
Listing in future
Small finance banks set up in future would be expected to list within eight years of commencement of operations, while universal banks would list within six years of operations.
Significantly, the criteria to assess the ‘fit and proper’ status of promoters or major shareholders as prescribed in the ‘Guidelines for on tap Licensing of Universal Banks in the Private Sector – 2016’ are appropriate and may be continued.
“Going forward, a harmonised approach may be adopted in various guidelines,” the RBI has said.
The RBI said, the consequential amendments in instructions, circulars, master directions, and licensing guidelines following the acceptance of the recommendations (with or without modifications) are being carried out and will be notified in due course.
However, during the interregnum, all stakeholders may be guided by these decisions, it further said.
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