The Reserve Bank of India has increased the long-term cap on promoters’ stake in private sector banks, allowing them to hold 26% instead of 15% at present.
While the RBI did not say whether the proposal to allow corporate houses to operate private banks was put on hold, it did say that the remaining 12 proposals were being considered.
“Cap on promoters’ stake [the] The long term of 15 years of the paid-up voting equity share capital of the bank may be increased from the current level of 15% to 26%. This condition should be same for all types of promoters and will not mean that the promoters, who have already reduced their stake below 26%, have to increase it to 26% of the paid-up voting equity share capital of the Bank. will not be allowed. ,” said the RBI.
It added, “The promoters, if they so desire, may choose to bring down the holding below 26% at any time after the lock-in period of 5 years.”
In 2020, an internal working group suggested that corporates could be considered for running private sector banks.
RBI has doubled the initial paid-up voting equity share capital/net worth required to set up a new Universal Bank to ₹1,000 crore from the current ₹500-crore norm.
RBI said that an Internal Working Group (IWG) was constituted on June 12, 2020 to review the existing guidelines on ownership and corporate structure for Indian private sector banks.
The report submitted by the IWG was placed on the RBI website on November 20, 2020, inviting comments from stakeholders and members of the public by January 15, 2021.
“The IWG had made a total of 33 recommendations. After examining the comments and suggestions received from stakeholders and members of the public, it has been decided to accept the 21 recommendations (with some partial modifications, where necessary),” it said.
“The rest of the recommendations are being examined,” it added.
“Consequent amendments to the instructions/circulars/master directives/licensing guidelines after acceptance of the recommendations (with or without amendments) are being made and will be notified in due course. However, during the interval, all stakeholders shall be guided by these decisions.” can be done,” it further said.