RBI approves SBI Mutual Fund stake in Bandhan, RBL Bank
Why in the news
The central bank cleared SBI Mutual Fund to raise its holding in two private lenders, within ownership ceilings.
Key facts
- Banks: Bandhan Bank and RBL Bank.
- Ceiling: 9.99% in each; more needs fresh RBI approval.
- Deadline: one year, then approval lapses automatically.
- Falling below 5% means fresh approval before going back to 5% or above.
Rules to comply with
- Banking Regulation Act, 1949
- RBI norms on share acquisition in private banks
- SEBI regulations
- FEMA, 1999
Why RBI approval is needed
It protects bank stability, checks ownership concentration and allows a fit-and-proper test. Usually 5% or more in a private bank needs RBI nod.
About SBI Mutual Fund
Large asset manager set up in 1987; joint venture of State Bank of India and Amundi (France).
Exam angle
- Ceiling: 9.99% in each bank.
- Time limit: one year.
- Joint-venture partner: Amundi.
- Acts: Banking Regulation Act 1949, FEMA 1999.