On 16 January 2023, IND RBI issued a master direction on substantial shareholding in banks.
- IND RBI issued the Master direction RBI (acquisition and shareholding or voting rights in banking companies) directions, 2023 and accompanying guidelines.
- The master direction may be read along with the Guidelines on acquisition and shareholding or voting rights in banking companies issued by IND RBI (guidelines).
- Ensure ultimate ownership and control of banking companies are well diversified and major shareholders of banking companies are fit and proper on a continual basis.
- Applies to banking companies (defined in clause (c), s. 5 of Banking regulation act, 1949), incl local area banks, small finance banks, payments banks operating in India.
- Includes prior approval procedure, due diligence, detecting violation of s.12B(1) Banking regulation act, 1949, diversified shareholding and reporting requirements.