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RBI to review private banks’ ownership & control norms

The central bank has set up a five-member working group to review the extant licensing guidelines and regulations relating to ownership and control in private sector banks and suggest appropriate norms.

By: ENS Economic Bureau | Mumbai |
June 13, 2020 12:25:48 am
reserve bank of India, rbi, private banks As per the RBI, the panel will examine and review the eligibility criteria for individuals/ entities to apply for banking license and make recommendations on all related issues.

The Reserve Bank of India has decided to review the current licensing and regulatory guidelines relating to ownership and control, promoters’ holding, requirement of dilution, control and voting rights of private banks.

The central bank has set up a five-member working group, to be headed by Prasanna Kumar Mohanty, director, Central Board of the RBI, to review the extant licensing guidelines and regulations relating to ownership and control in private sector banks and suggest appropriate norms. This review is being undertaken, “keeping in mind the issue of excessive concentration of ownership and control and having regard to international practices as well as domestic requirements”, the RBI said.

As per the RBI, the panel will examine and review the eligibility criteria for individuals/ entities to apply for banking license and make recommendations on all related issues. It will study current regulations on holding of financial subsidiaries through non-operative financial holding company and suggest the manner of migrating all banks to a uniform regulation in the matter, including providing a transition path, RBI said. The panel will review norms for promoter shareholding at the initial/licensing stage and subsequently, along with timelines for dilution of shareholding and identify any other issue germane to the subject matter and make recommendations.

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