New Delhi, Nov 26th : .The Reserve Bank of India accepted 21 of 33 recommendations from an internal working group that examined the ownership and corporate structure of India’s private sector banks. The central bank created the internal group on June 12, 2020 in order to review existing guidelines regarding ownership and corporate structure of Indian private sector banks.
“After reviewing the comments and suggestions received by the stakeholders and members the public, it was decided to accept 21 recommendations (some with partial modification where necessary).
The RBI stated that the remaining recommendations are still being examined.
The central bank accepted the recommendation that promoters’ stakes in the long-term of 15 years be increased from the current levels, which are currently at 15% to 26% of the bank’s paid-up voting equity capital.
The RBI stated that “this stipulation should apply to all types of promoters” and that it would not prohibit promoters who have already reduced their holdings below 26 percent from being allowed to increase it to 26 percent of the bank’s paid-up voting equity capital.
The working group also suggested a monitoring mechanism to ensure that control over promoting the entity or major shareholder does not fall into the hands of people who are not considered fit and proper.The RBI also accepted this recommendation.
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