The Reserve Bank of India (RBI) is yet to take a view on the entry of corporates into the banking space while it has allowed promoters to own up to 26% stake in private banks.

The RBI has neither accepted nor rejected an internal panel’s proposal to give banking licences to large business groups. On the 33 recommendations of its internal working group (IWG), the central bank has, however, accepted 21 of them.

Last year, the IWG had proposed that large industrial groups be allowed to become promoters of banks after necessary amendments to the Banking Regulations Act, 1949.

The issue of large corporate houses owning banks has become an important debating point in the wake of government deciding to privatise a few state-owned banks.

The business groups who may expand into banking include Bajaj Group, Piramal Group and Reliance Industries.

Meanwhile, the RBI has accepted the recommendation to up the cap on promoters’ stake in the long run of 15 years to 26%, from 15% at present. This stipulation will be uniform for promoters. Thus, promoters who have diluted their holdings will be permitted to raise it to 26%. As per the existing rules, private bank promoters have to lower their holding to 40% in three years, 20% within 10 years, and 15% within 15 years of obtaining a banking licence.

“The promoter, if he/she so desires, can choose to bring down holding to even below 26%, any time after the lock-in period of five years," RBI said.

However, the lock-in clause of  promoters holding at least 40% stake in the bank for the first five years remains unchanged.

“The minimum requirement on track record of experience of promoting entity, including for a converting NBFC, may continue at 10 years for universal banks and 5 years for small finance banks,” the RBI said.

The central bank has also accepted suggestions regarding increasing the minimum initial capital required to set up banks. For instance, the initial paid-up voting equity share capital or net worth required to set up a new universal bank will be doubled to Rs 1,000 crore. It will be raised to Rs 300 crore from Rs 200 crore at present for small finance banks.