The petitioner cited three recommendations in relation to the cap on promoters’ holdings and monitoring to ensure that the control of a promoting entity/major shareholder of the bank did not fall in the hands of persons who are not found to be fit and proper.
“Recommendation No.2: There is no need to fix any cap on the promoters’ holding in initial five years.
Recommendation No. 3: The cap on promoters’ stake in long run of 15 years may be raised from the current levels of 15 per cent to 26 per cent of the paid-up voting equity share capital of the bank. This stipulation should be uniform for all types of promoters and would not mean that promoters, who have already diluted their holdings to below 26 per cent, will not be permitted to raise it to 26 per cent of the paid-up voting equity share capital of the bank. The promoter, if he/she so desires, can choose to bring down holding to even below 26 per cent, any time after the lock-in period of five years. It is clarified that the lock-in period here refers to initial lock-in period.
Recommendation No. 6: A monitoring mechanism may be devised to ensure that control of promoting entity/ major shareholder of the bank, does not fall in the hands of persons who are not found to be fit and proper. Licensing conditions/ approvals for acquisitions may stipulate reporting requirements whenever a shareholder becomes a significant beneficial owner (as defined in the Companies Act, 2013) of the promoting entity/ major shareholder of the bank.”
Source: Barandbench
