Reducing promoter stake in private banks: RBI panel for nuanced approach

The RBI committee has recommended doing away with one size fits all approach to private banks' ownership

A Reserve Bank of India committee has recommended doing away with one size fits all approach to ownership in private sector banks. Instead of the current bank licensing rules which make it mandatory for promoters of private bank to reduce their ownership to 40 per cent within three years and to settle at 15 per cent in 15 years, the committee headed by RBI executive director PK Mohanty has suggested a more nuanced approach. The report of the committee is to be made public soon.

It has also suggested a rereading of the fit and proper criteria for entities that wish