The Reserve Bank of India (RBI) proposed today that while AMCs, insurance companies and pension funds will be required to get an approval from RBI for initial acquisition of major shareholdings, all subsequent stake purchases could be made with a one-time approval. Once received, this approval will be valid unless it is revoked by the RBI. Currently, any AMC, insurance company or pension fund is required to get an approval from RBI for an initial stake purchase of five per cent or more in a bank or any subsequent stake purchase if its aggregate shareholding in the bank falls below five per cent at any point of time.
Once the one-time approval is obtained, these entities will also be required to report any increase or decrease in the stake above or below five per cent to RBI and the concerned banking company within one day of such an event. The entities will also be required to submit additional information requested by the RBI if they want to acquire over 10% of the paid-up share capital or voting rights of the banking company.
The proposal aims to simplify the approval process for subsequent stake purchases in a banking company by these entities. The proposal will be applicable for stake purchase in commercial banks, small finance banks, payment banks and local area banks.
The central bank has invited feedback on these proposals from regulated entities, members of the public and other stakeholders on or before August 4, 2026.