Rbi Moves Centre To Lift 10% Voting Rights Cap In Pvt Banks

The Reserve Bank of India (RBI) has moved the Centre asking it to abolish the 10 per cent cap on the voting rights of foreign shareholders in private banks. RBI deputy governor G P Muniappan said though the foreign direct investment (FDI) limit in private sector banks has been raised, the cap on voting rights has proved a dampner in attracting foreign investments.

Muniappan was speaking on the sidelines of a Federation of Indian Chambers of Commerce and Industry (Ficci) seminar on banking in Mumbai today.

To remove the cap, the Banking Regulation Act, 1949, needs to be amended. The Centre is currently reviewing the amendments.

 

According to the deputy governor, doing away with the 10 per cent limiting factor will be go well with the government