A 10 per cent safeguard

The RBI has issued draft guidelines for private bank licences. These emphasise dispersed shareholding. Proposed rules on entry into banking require that, for a company to get a bank licence, no one entity hold above 10 per cent shares in a company. These rules are similar to those proposed by the Bimal Jalan committee that, for the ownership of an exchange, no one entity hold above 5 per cent shareholding. These rules are on the right track.

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