Review of Equity Investment by Banks

To give more operational freedom and flexibility in decision making, it is advised that banks which have CRAR of 10 per cent or more and have also made net profit as on March 31 of the previous year, need not approach Reserve Bank of India for prior approval for equity investments in cases where after such investment, the holding of the bank remains less than 10 per cent of the investee
company’s paid up capital, and the holding of the bank, along with its subsidiaries or joint ventures or entities continues to remain less than 20 per cent of the investee company’s paid up capital.