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RBI ups private banks' founder stake limit

The Reserve Bank of India raised on Friday the maximum stake that domestic founders can own in a private bank to 49 per cent from 40 per cent.

The RBI said in a statement that it had raised this limit to the level now allowed for foreign direct investment in private banks.

The RBI had said in January 2001 that Indian founders must not own more than 40 per cent of the paid-up capital of the bank.

If the founders' initial holding exceeded 40 per cent, they had to dilute this stake after one year of the bank's operations.

Under an earlier guideline, issued in January 1993, Indian founders had to reduce their combined equity to 40 per cent within a stipulated period.

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