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March 20, 2002 | 2040 IST
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RBI eases share-issue rules for private banks

The Reserve Bank of India on Wednesday said that it will allow private banks to issue shares through a rights or bonus issue without its permission.

"Banks will also be free to price their subsequent issues (without central bank approval) once their shares are listed on the stock exchange," an RBI statement said.

Until now unlisted Indian banks had to obtain central bank approval to issue all types of shares - initial public offerings, preferential, rights and bonus shares, and shares allotted to employees.

Listed private banks do not require central bank approval to issue shares except bonus shares linked to a rights issue.

Currently there are about 30 private banks in India, and more than half are listed on stock exchanges.

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