Indian Bank Gets RBI Approval to Keep Higher Stake in ASREC Until 2026:

Indian Bank Gets RBI Approval to Keep Higher Stake in ASREC Until 2026 The Ministry of Finance has allowed Indian Bank to keep holding more than 30% shares in ASREC (India) Limited until March 31, 2026. This special approval came after a suggestion from the Reserve Bank of India (RBI). According to Notification No. S.O. 2138(E) dated May 14, 2025, the government suspended a banking regulation (Section 19(2) of the Banking Regulation Act) of the Indian Bank temporarily. The regulation would otherwise bar banks from owning over 30% of the shares in any company.

Key Highlights of the Notification

• Exemption From: Indian Bank
• Out of Exceeding Stake In: ASREC (India) Limited
• Section 19(2) of the Bank Regulation Act,1949-- Other statutory provisions irrelevant.
• Exemption Validity: Upto 31.03.2026
• Operative: On publication in the Official Gazette

Background: What is Section 19(2)?

Section 19(2) of the Banking Regulation Act says that banks can not hold more than 30% of shares in any company (except their own subsidiaries). But under Section 53(1), the government can make an exception—if the RBI agrees and it is in the public interest.

What is ASREC (India) Ltd?

ASREC (Asset Reconstruction Company - India) works to recover bad loans (NPAs) in the Indian banking system. Indian Bank’s big share in ASREC helps the bank deal with and recover such troubled loans better. For Further Details, refer to the Official Notification