•  On June 25 2004, ‘fit and proper’ criteria for directors of private sector banks were spelt out by RBI based on qualification, expertise, track record and integrity of persons to be appointed as directors of banks. The process of due diligence is to be undertaken by the bank at time of appointment and renewal.
•  On July 6 2004, banks / FIs were advised that they should not acquire any fresh stake in a bank’s equity shares, if by such acquisition, the investing bank’s/FI’s holding exceeds 5 per cent of the investee bank’s equity capital. Why are the guidelines being made applicable for existing banks? The banking sector is already quite large and widespread.