INDIA: Amendments to Banking Law will require approval of India substantial acquisitions exceeding 5%

Friday January 25 2013

The Banking Laws (Amendment) Bill, 2012 was cleared by both the Houses of the Indian Parliament in December 2012 and awaits the President’s assent to become the Banking Laws (Amendment) Act, 2012. The Bill was introduced in order to amend the Banking Regulation Act, 1949, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980.

Among other changes, the new rules will provide for a requirement to seek prior approval from the Reserve Bank of India for acquisition of 5% or more of shares or voting rights in a banking company by any person. RBI will be empowered to impose such conditions as it deems fit in this regard.

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