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.