RBI Refrains From Corporate Entry Into Banks, Allows Higher Promoter Stake


Reserve Bank of India (RBI) has refrained from allowing the corporate ownership of banks, putting on hold the recommendations from its internal working committee – that said large corporate and industrial houses may be allowed to promote banks after amendments to the Banking Regulations Act, 1949. The central bank has also not accepted a recommendation to allow well-run, large non-banking financial corporations or NBFCs, including those owned by a corporate house, to become banks.

RBI on Friday said that both suggestions are under examination. However, the central bank has allowed promoters to retain a 26 per cent shareholding in banks, higher than the current cap of 15 per cent, bringing relief to bankers like Kotak Mahindra Bank’s Uday Kotak.



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