RBI nod must for investors picking up more than 5% stake in a private bank
In a bid to have a greater scrutiny over banking ownership the Reserve bank of India has said that new investors who buy over 5 per cent shares or convertible debt of a private sector bank will have to get the central bank’s approval.
Existing promoters will also have to take the RBI’s approval if they intend to increase their holding to beyond 10 per cent in the bank.
The shareholders having 5 per cent or more of the paid up share capital of a bank would have to give an annual declaration on their ‘Fit and Proper’ status. However, the major shareholder will have furnish the details of the source of funds for such incremental acquisition and obtain ‘no objection’ from the concerned bank.
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