RBI increased the cap on promoters’ stake in the long run of 15 years to 26%, from 15% at present. MINT
MUMBAI: The Reserve Bank of India (RBI) has kept in abeyance a recommendation by an internal panel to give banking licences to large business groups, while allowing promoters to own up to 26% in private banks.
On Friday, RBI said it had accepted 21 recommendations with some modifications of the 33 proposed by the committee in November last year.
One of the most contentious proposals made by the five member panel was to allow large corporate houses to act as promoters of banks after amendments to the Banking Regulation Act.
Last year, experts pointed out that RBI would face challenges in supervising non-financial sector entities, and supervisory resources could be further strained.
While not accepting this recommendation and some other suggestions, RBI said the remaining are under examination. However, the plan to offer large corporates to set up banks faced wide criticism, with experts and even former central bank governor Raghuram Rajan warning against it.
This story is from the November 27, 2021 edition of Hindustan Times Delhi.
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This story is from the November 27, 2021 edition of Hindustan Times Delhi.
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