UPSC Prelims Practice Questions — Kotak Bank gets RBI nod to buy 9.99% each in AUSFB, Federal Bank

Q1. As per Section 12B of the Banking Regulation Act, 1949 read with the RBI's 2023 Master Direction, what is the minimum aggregate shareholding (as % of paid-up share capital or voting rights) in a banking company at which prior approval of the Reserve Bank of India becomes mandatory for the acquirer?

  • A. 5%
  • B. 10%
  • C. 15%
  • D. 26%

Q2. In the context of the RBI's directions on acquisition of shares in banking companies, the expression 'major shareholding' means:

  • A. An aggregate holding of 5% or more of the paid-up share capital or voting rights in a banking company
  • B. A holding that confers the right to nominate at least one director on the bank's board
  • C. A holding of 26% or more of the paid-up share capital, attracting the SEBI Takeover Code
  • D. A controlling stake of more than 50% of the paid-up share capital of the banking company

Q3. Which one of the following is the primary statutory provision that empowers the Reserve Bank of India to require prior approval for acquisition of a 'major shareholding' in a banking company — the very provision invoked while clearing Kotak Mahindra Group's 9.99% stake in AU SFB and Federal Bank?

  • A. Section 12B of the Banking Regulation Act, 1949
  • B. Section 22 of the Banking Regulation Act, 1949
  • C. Section 35A of the Banking Regulation Act, 1949
  • D. Section 45 of the Banking Regulation Act, 1949