Reserve Bank of India issued an appropriate set of guidelines for shareholders in private sector banks by differentiating two segments which include natural persons and legal entities. The new guidelines will help both the entities’ shareholder section meet the extradition capital appear under Base III regulations and thus, channelise the limits of owners. Just as to bring under categories, the premium financial institution distinguished the boundaries of financial and non-financial institutions keeping it under the subcategory of diversified and non-diversified systems respectively.
According to RBI officials, For all existing banks, the permitted promoter/promoter group shareholding will be in line with what has been permitted in the February 22, 2013 guidelines on licensing of universal banks at 15 per cent.In case of financial institutions that are owned to the extent of 50 per cent or more or controlled by individuals, the shareholding would be deemed to be by a natural person and the shareholding will be capped at 10 per cent.
RBI’s new guidelines serve as to keep hold of its priorities for those who are willing to increase voting rights up to 5% more. Along with it stakeholders who feel to acquire stake above 5% may continue with the proceedings. FDI, FII & NRIs can’t exceed 74% of paying capitals in accordance to acquiring shareholders in private banks.
Banks which are overseas born can continue acquiring the stake in a bank’s shareholdings which is up to 10%. If in exceptional circumstances such as reconstructing of weak or underprivileged banks, may get permission for the higher level of shareholding. The acquisitions come under certain terms, and conditions like banks which have no supervisory concern may avail the benefit of acquisitions only after the bank’s support or else they would not be allowed for the same.
On the other hand, in a context of acquisitions of shareholders in private sector bank changes may come if only RBI feels. They may rethink on the matter of changes in ownership or management of the concerned bank thus, giving permission to the single entity or person to get access of higher shareholders even though other bank personnel or control group differ in views.