RBI accepts 21 recommendations on ownership of private banks
IANS 29 November 2021
The Reserve Bank of India has accepted 21 out of the 33 recommendations submitted by an internal working group on the ownership and corporate structure of India's private sector banks.
The internal group was constituted by the central bank on June 12, 2020 to review the extant guidelines on ownership and corporate structure for Indian private sector banks.
"After examining the comments and suggestions received from the stakeholders and members of the public, it has been decided to accept 21 recommendations (some with partial modifications, where considered necessary). The remaining recommendations are under examination," the RBI said.
Among the recommendations that were accepted by the central bank was that the cap on promoters' stake in the 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.
The working group had also recommended a monitoring mechanism that may be devised to ensure that control of promoting the entity or major shareholder of the bank, does not fall in the hands of persons who are not found to be fit and proper. This recommendation was also accepted by the RBI.
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Kamal Garg
6 months ago
Finally, some good sense has prevailed upon RBI in terms of "ownership" of private banks in India. How would some one run a bank efficiently when there is always a danger of precarious/less ownership and therefore you cannot have the comfort of owning and running a good private sector bank. Why would some one toil his time, energy and talent to build the bank when there is a serious question mark on the ownership of the bank itself.
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