The Reserve Bank of India (RBI) on Thursday tweaked the guidelines on ownership or shareholding in private sector banks.
The central bank said ownership limits for all shareholders in the long run are now stipulated under two broad categories, namely natural persons or individuals, and legal persons that comprise entities or institutions.
Further, separate limits are now stipulated for non-financial and financial institutions; and among financial institutions, for diversified and non-diversified financial institutions.
The ceiling for shareholding under the natural persons category stands at 10%.
Under the legal person category, non-financial institutions or entities have a ceiling of 10%. For financial institutions that are non-regulated or non-diversified and non-listed, the ceiling stands at 15%.
The RBI pointed out that in case of financial institutions that are owned to the extent of 50% or more or controlled by individuals, the shareholding would be deemed to be by a natural person and the shareholding will be capped at 10%.
On the other hand, financial institutions that are regulated, well-diversified and listed, supranational institution, public sector undertaking/government have a ceiling of 40%.