India – RBI Shareholding in Banks

India – RBI Shareholding in Banks

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.


  • The directions are effective from the date of issue, 16 January 2023.
  • Related master directions from 2015, 2016 on prior approval for acquisition, issue and pricing of shares, and ownership in private sector banks are repealed from same date.