DBOD.No.PSBS.BC.72/16.13.100/98-99

July 10, 1998

Aashadha 18, 1920 (Saka)

 

The Chairman,

All Indian Commercial Banks in the Private Sector

Dear Sir,

Issue of shares by private sector banks

Please refer to our Circular DBOD. No. BC. 76/16.13.100/94 dated June 17, 1994 on the abovementioned subject. In terms of instructions given in paragraph 4 of the Circular, banks in the private sector are required to obtain prior approval of Reserve Bank of India (RBI) for issue of all types of shares viz. public, preferential, rights/special allotment to employees and bonus shares.

. These instructions have been reviewed and it has been decided that in future, banks whose shares are listed on the stock exchanges need not seek prior approval of RBI for issue of shares except Bonus shares. The banks should, however, comply with relevant regulations of the Securities and Exchange Board of India (SEBI) and seek their approval, wherever necessary.

2. As and when issues of the above categories of shares are made by a bank, it should submit a report to us giving full details of the issue.

3. As indicated above, banks should continue to obtain prior approval of RBI for issue of Bonus shares.

Yours faithfully,

(L. D'Souza)

General Manager