The Reserve Bank of India (RBI) has accepted 21 out of 33 recommendations of the internal working group that was set up to review extant ownership guidelines and corporate structure for Indian private sector banks.
The Central Bank said it had made some partial modifications where it considered them to be necessary and the remaining recommendations are under examination.
The RBI has accepted recommendation of raising cap on promoters’ stake from the current levels of 15% to 26% of the paid-up voting equity share capital of the bank.
On the lock-in period for promoters’ initial shareholding, limits on shareholding in long run, dilution requirement and voting rights, no change may be required in the extant instructions related to initial lock-in requirements, which may continue as minimum 40% of the paid-up voting equity share capital of the bank for first five years.
It has also tweaked limits for non-promoter shareholding in private banks.
Further, the Central Bank has accepted the recommendation to disallow pledge of promoter shares during lock-in period.
The RBI on November 20 had released the report on the working group recommendations on private bank ownership and corporate structure.
However, Reuters reported that the changes would not include allowing industrial groups to own lenders. Bank promoters currently do not include industrial groups whose holdings in a bank are capped at 10%.
Source : Livemint
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