RBI prior approval now a must for picking up over 5% stake in banks

RBI has defined "major shareholding" as "aggregate holding" of five per cent or more of the paid-up share capital or voting rights in a banking company by a person

The Reserve Bank of India (RBI) on Monday said any person looking to acquire more than 5 per cent stake in a bank will need prior approval from the regulator.
 

“Any person who intends to make an acquisition, which is likely to result in major shareholding in a banking company, is required to seek previous approval of the RBI by submitting an application,” the regulator said in the master direction on Acquisition and Holding of Shares or Voting Rights in Banking Companies.
 

The RBI has defined “major shareholding” as “aggregate holding” of 5 per cent or more of the paid-up