Master Direction – Ownership in Private Sector Banks, Directions, 2016
The Reserve Bank of India (RBI) has issued a master direction on ownership in private sector banks, effective May 12, 2016.
The direction applies to all private sector banks and outlines the principles for shareholding limits, including:
- Matrix of shareholding limits for different categories of shareholders, including promoters, natural persons, legal persons, non-financial institutions, and financial institutions.
- Ceiling on voting rights for each category of shareholder.
The direction also outlines overarching principles for shareholding in private sector banks, including:
- Principles for shareholding limits, including the requirement for promoters to gradually reduce their stake in the bank.
- Definitions of various terms, including “promoter group”, “non-regulated or non-diversified and non-listed”, and “regulated, well diversified and listed”.
The direction is divided into three chapters: Preliminary, Shareholding and Voting Rights Limits in Private Sector Banks, and Overarching Principles for Shareholding in Private Sector Banks.
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Download: Master Direction – Ownership in Private Sector Banks, Directions, 2016