Ownership and governance of private sector banks - Part III

Going beyond its recommendations on ownership of private sector banks, there are some other internal working group (IWG) recommendations that bear scrutiny. The IWG suggests that, along with the resting limit for promoter shareholdings to be raised from 15 to 26 per cent, the non-promoter shareholdings limit be raised from 10 to 15 per cent for all kinds of shareholders, including other industrial houses and presumably other banks. This can potentially contribute to a great degree of tension in the management of the bank concerned. It would be possible, for example, for two other nonfinancial companies to own, say 15

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