Reserve Bank raises promoter stake holding from 15 to 26 pc
Reserve Bank raises promoter stake holding from 15 to 26 pc
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The Reserve Bank of India (RBI) has increased the promoter's holding in private banks from 15 percent to 26 percent of the bank's paid-up voting equity share capital in the long run, up from the current ceiling of 15 percent.

The RBI announced on Friday that it has approved 21 of the 33 recommendations made by the internal working group, which was formed to evaluate the guidelines on private sector bank ownership and corporate structure. The central bank has made some minor adjustments where it deemed them necessary.

"This stipulation should be uniform for all types of promoters and would not indicate that promoters who have already diluted their holdings to below 26 percent of the bank's paid-up voting equity share capital will not be authorised to raise it to 26 percent," the RBI said in a statement.  The promoters have the option to reduce their share to less than 26 percent at any point following the five-year lock-in term if they so desire.

The RBI's internal working group recommends allowing promoters to keep whatever percentage of the company for the first five years, then capping it at 26 percent after 15 years.

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