RBI Draft: One-Time Approval for Bank Shareholding by Funds

15 July 20261 min read

Why in the news

The RBI published a draft amendment to ease permissions for mutual funds, insurers and pension funds holding large stakes in banks.

Major shareholding means 5% or more.
The first major stake in a bank would still need RBI approval.
After that, a one-time approval would cover later purchases in that bank up to 10%, under RBI conditions.

Point	Today	Proposed
Crossing 5%	Prior approval	Only for the first time
Dropping below 5%, then re-crossing	Fresh approval	None needed

1. Under the RBI's draft one-time approval proposal, at what shareholding does a mutual fund currently need prior RBI approval in a bank?

Prior approval applies to acquiring major shareholding of 5% or more.

2. Up to what share of a bank's paid-up capital or voting rights would the RBI's proposed one-time approval remain valid?

The one-time approval would cover acquisitions up to 10% in the same bank.

3. Which investors are covered by the RBI's draft amendment on one-time approval for major shareholding in banks?

The draft covers mutual funds, insurance companies and pension funds.