Banking Amendment Bill 2011
... introduced to order to amend the Banking regulation act-1949, Banking companies act-1970/80.
passed on 18 Dec'2012 by both the houses.
The bill strengthen the regulatory power of RBI & enables nationalized banks to raise capital. It also pave the way for new bank licenses. Broadly these are the five important features in the bill:
1- Raise cap on voting rights in
Private sector- from 10% to 26%
Public sector - from 1% to 10%
2- CII will approve M&A (mergers & acquisitions) in banks but In case if the bank is under trouble, RBI have the final authority.
3- To raise capital of nationalized banks, RBI have done following changes:
(i) removed ceiling of Rs 3000 cr
(ii) allows two additional instruments (Bonus share, Right issue)
4- RBI have the power to supersede the bank board not more than 12 months, during this period an administrator will take care of bank.
5- Important Guidelines for new licenses:
(i) Only Indian resident groups are allowed to promote a bank.
(ii) The min paid up capital will be Rs. 5 Billion.
(iii) 25% branches should be in unbanked rural areas.
(iv) The bank need to list in stock exchange within 2 years.
(v) Shareholding greater than 5% by individual or group requires RBI approval.
For any query feel free to write me on tk.pccs2@gmail.com
