Banking on change: banking laws amended

By Sawant Singh, Aditya Bhargava and Davis Kanjamala, Phoenix Legal
0
1733
LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

The year has started on a bright note for the banking sector with the enactment of the Banking Laws (Amendment) Act, 2012, which makes several far-reaching changes to existing banking legislation and increases the ambit of regulatory oversight of the Reserve Bank of India (RBI). It is expected that these changes will pave the way for entry of new players in this field, leading to greater competition, efficiency and wider financial inclusion.

Capital amendments

The act stipulates that new banks will have an authorized share capital of ₹30 billion (US$565 million), doubling the previous limit of ₹15 billion, comprising 3 billion fully paid-up shares of ₹10 each. While banks may obtain the RBI’s permission to vary the number and denomination of shares, the central government may, in consultation with the RBI, increase or decrease the authorized capital limit.

Sawant Singh
Sawant Singh

Another welcome development has been the permission granted to banks to issue preference shares (not permitted earlier) in accordance with guidelines framed by the RBI. The act expressly states that such preference shares, if issued, would however not enjoy voting rights. Under Indian company law, limited voting rights are typically associated with such instruments.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Sawant Singh is a partner, Aditya Bhargava is a senior associate, and Davis Kanjamala is an associate at the Mumbai office of Phoenix Legal.

Phoenix_Legal_-_logo

New Delhi

Second Floor,

254, Okhla Industrial Estate, Phase III, New Delhi-110020

India

Tel +91 11 4983 0000

Fax: +91 11 4983 0099

Email: delhi@phoenixlegal.in

Mumbai

First Floor, CS-242,

Mathuradas Mill Compound,

NM Joshi Marg, Lower Parel Mumbai – 400 013, India

Tel: +91 22 4340 8500

Fax: +91 22 4340 8501

Email: mumbai@phoenixlegal.in

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link