RBI issues guidelines on Acquisition and Holding of Shares in Banking Companies

RBI’s Guidelines on Acquisition, dated: 16.01.2023

The RBI has issued guidelines on the ‘Acquisition and Holding of shares or voting rights in banking companies’ allowing promoters to hold 26% of paid-up share capital or voting rights of a bank after the completion of 15 years from the commencement of business of a banking company. Further, the RBI may permit higher shareholding on a case-to-case basis under the circumstances such as supervisory intervention including Prompt Corrective Action, or any other action in the interest of the banking company.

Further, in case of a person permitted by the RBI to have a shareholding of 10% or more of the paid-up equity share capital of the banking company but less than 40% of the paid-up equity share capital, the shares acquired shall remain under lock-in for first five years from the date of completion of the acquisition.

Also, in case of any person permitted to have a shareholding of 40% or more of the paid-up equity share capital of the banking company, only 40% of paid-up equity share capital shall remain under lock-in for the first five years from the date of completion of the acquisition.

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