The Reserve Bank of India has amended its payments bank shareholding directions to allow eligible mutual funds, insurance companies and pension funds to obtain one-time approval for subsequent major shareholding acquisitions of up to 10% of a bank’s paid-up share capital or voting rights. Initial acquisitions of major shareholdings remain subject to prior approval. The measure takes effect immediately and mirrors the streamlined approval framework introduced for commercial banks. Approval is discretionary, may cover investors individually or collectively and applies on an aggregate holding basis. Eligible investors must be registered with the relevant securities, insurance or pension regulator and cannot belong to the investee bank’s promoter group. Approved investors remain subject to continuous monitoring and must notify the Reserve Bank and the payments bank within three working days when aggregate holdings fall below or rise above 5%. The amendments also clarify when a client’s acquisition through a portfolio manager will not be treated as an indirect acquisition.
Reserve Bank of India allows one-time approval for institutional investors’ subsequent acquisitions of up to 10% in payments banks
The Reserve Bank of India now allows eligible mutual funds, insurers and pension funds to seek one-time approval for subsequent major shareholding acquisitions of up to 10% in a payments bank. Initial major acquisitions still require prior approval, while approved investors are subject to aggregate limits, continuous monitoring and three-working-day reporting when holdings cross the 5% threshold. The amendments take effect immediately.