Centre to bring new amendment

New Delhi, Dec. 11: The government is considering a proposal that will make prior approval of the RBI mandatory for acquiring five per cent or more stake in a banking company, the Parliament was informed on Friday.

A proposal to amend the Banking Regulation Act is under consideration of the government where a new section 12B would be added to the rules “to provide prior approval of the Reserve Bank of India for acquisition of five per cent or more of shares or voting rights in a banking company by any person,” the minister of state for finance, Mr Namo Narain Meena, told the Lok Sabha in reply to a question.

The amendment would also empower the Reserve Bank to impose conditions to satisfy itself that the acquisition of shares of a banking company is by a person considered ‘fit and proper’ and that the applicant continues to be ‘fit and proper’ to hold the shares or voting rights, the minister said.

The minister was being asked if the government was bringing some amendment in the Banking Regulations to check voting power or monopoly of foreign entities.