RBI raises private bank promoter stake cap

‘Other proposals under examination’

The Reserve Bank of India has raised the long-term cap on promoters’ stakes in private sector banks, allowing them to hold 26% instead of the 15% in force currently.

Though the RBI did not say that the proposal to allow corporate houses to operate private banks, had been shelved, it said that the remaining 12 proposals were under examination.

“The cap on promoters’ stake in [the] long run of 15 years may be raised from the current levels of 15% to 26% of the paid-up voting equity share capital of the bank. This stipulation should be uniform for all types of promoters and would not mean that promoters, who have already diluted their holdings to below 26%, will not be permitted to raise it to 26% of the paid-up voting equity share capital of the bank,” the RBI said.