Published: October 3, 2026
StartupFeed Quick Take
- The new RBI bank stake rule sets a 3-working-day deadline to report any move across the 5% mark.
- Eligible funds can get one-time RBI approval to buy up to 10% of a bank.
- It took effect on October 1, 2026, for all bank types, and covers mutual funds, insurers and pension funds.
The Reserve Bank of India has set a three-working-day deadline for large investors to report when their stake in a bank crosses 5%, in rules that took effect in Mumbai on October 1, 2026.
The deadline is the part most reports skipped. The headline change was a new one-time approval that lets eligible funds buy up to 10% of a bank. The RBI amendment directions of October 1 carry both.
The rule applies to three kinds of investor: mutual funds registered with SEBI, pension funds registered with PFRDA, and insurance companies regulated by IRDAI. The investor must not be part of the bank’s promoter group.
Here is the exact reporting line from the RBI document:
“qualifying persons with one-time approval shall report decrease or increase of the aggregate holding to below or above five per cent… within three working days of such an event.”
Reserve Bank of India. From the Amendment Directions, 2026, October 1, 2026.
The report goes to both the RBI and the bank. The count is three working days, not three calendar days, so a weekend or a bank holiday does not count.
Before this, a fund whose stake fell below 5% after a major purchase had to seek fresh RBI approval before crossing 5% again. The one-time approval removes that repeat step for buys up to 10%.
Prior approval still applies to the first major purchase. Applications for the one-time approval go through the RBI’s PRAVAAH portal, and the bank must send its own comments to the RBI.
The change covers commercial banks, small finance banks, payments banks and local area banks. The RBI issued a separate amendment for each on the same day.
What this means for you: If you run a fund house, an insurer or a pension fund that holds bank shares, your compliance team now works to a three-working-day clock. Set an internal alert the moment any holding nears 5%, either way, so the RBI filing is never late.
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Disclaimer: This article is for information only and is not investment advice. StartupFeed and its authors are not SEBI-registered investment advisors. Please speak to a SEBI-registered advisor before investing.
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