It is said that the raise to 26% can be carried out in a phased manner.
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It was in December 2011 that the Parliamentary Standing on Finance had recommended raising voting rights of investors in the private sector banks with a cap of 26% in order to maintain balance between economic controls and promoting corporate democracy.
The Banking Laws (Amendment) Bill 2011 has also proposed providing voting rights to investors commensurate with their shareholding in the private sector banks.
Currently, the voting right is capped at 10% irrespective of the share holding in the private sector banks.
Additionally, in its report, the standing committee had suggested that the Reserve Bank of India (RBI) ensure that the regulatory mechanism is adequate and strictly complied with to prevent any misuse of the provision of increasing the limit.
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By GlobalDataThe Banking Laws (Amendment) Bill, 2011, will now be introduced in Parliament for approval and the proposed bill will become law after India’s parliament passes it following cabinet consent.
