The Reserve Bank of India (RBI) on Thursday finalised its July proposal to simplify bank shareholding rules, allowing eligible mutual funds, insurance companies and pension funds to seek one-time approval for subsequent acquisitions of major shareholding of up to 10 per cent in the same bank.
Under the earlier framework, an investor whose holding fell below 5 per cent after initially acquiring a major shareholding had to seek fresh RBI approval before crossing the threshold again. The amended rules replace this repeated approval requirement for eligible institutional investors with a one-time approval mechanism, while prior approval will continue to be mandatory for the initial acquisition of a major stake.
