The Reserve Bank of India (RBI) has reviewed the extant guidelines on ownership and shareholder structures in private sector banks.

The regulator has now stipulated separate ownership limits for natural persons (individuals) and legal persons. Separate limits have also been created for non-financial and financial institutions that have been further sub-divided into diversified and non-diversified financial institutions.

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"The guidelines have been reviewed against the background of the guidelines on licensing of new banks in the private sector issued in February 2013, the need for additional capital for the banks consequent to the implementation of Basel III capital regulations and to rationalise the ownership limits," the regulator said.

The new rules mandate foreign banks to invest up to 10% in local private lenders and supranational institutions, and allow individuals and institutions to acquire up to 10% in private banks.

Non-regulated, non-diversified and unlisted financial entities have now been allowed to hold up to 15% stake.

As per the new rule, non-financial institutions can hold up to a 10% stake, and non-financial companies can hold up to 15% stake.

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The regulator however, said that any share acquisition exceeding 5% in a bank will require approval from RBI.

The regulator has however retained total foreign shareholding in the banks at 74%.

"At all times, at least 26 per cent of the paid-up share capital of the private sector banks will have to be held by resident Indians," RBI said.