The Reserve Bank of India (RBI) on November 28, 2025 issued the Reserve Bank of India (Small Finance Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025, establishing a unified regulatory framework governing acquisition, holding, and ongoing monitoring of shareholding and voting rights in Small Finance Banks (SFBs). The Directions aim to ensure that ownership and control of SFBs remain diversified and that significant shareholders meet ‘fit and proper’ standards on a continuing basis.
The Directions prescribe prior-approval requirements for proposed acquisitions reaching major shareholding thresholds, specify detailed fit-and-proper criteria, and set out application procedures. They also mandate continuous monitoring mechanisms, including due diligence, detection of violations under Section 12B(1) of the Banking Regulation Act, and periodic reporting by banks. Additional provisions address limits on shareholding, lock-in requirements, and voting-right ceilings, aligning them with overarching RBI ownership guidelines.
[Notification No. RBI/DOR/2025-26/176]
