Section 12B(1) in The Banking Regulation Act, 1949
(1)No person (hereinafter referred to as "the applicant") shall, except with the previous approval of the Reserve Bank, on an application being made, acquire or agree to acquire, directly or indirectly, by himself or acting in concert with any other person, shares of a banking company or voting rights therein, which acquisition taken together with shares and voting rights, if any, held by him or his relative or associate enterprise or person acting in concert with him, makes the applicant to hold five per cent. or more of the paid-Up share capital of such banking company or entitles him to exercise five per cent. or more of the voting rights in such banking company.Explanation 1. - For the purposes of this sub-section,-(a)"associate enterprise" means a company, whether incorporated or not, which,-(i)is a holding company or a subsidiary company of the applicant; or(ii)is a joint venture of the applicant; or(iii)controls the composition of the Board of Directors or other body governing the applicant; or(iv)exercises, in the opinion of the Reserve Bank, significant influence on the applicant in taking financial or policy decisions; or(v)is able to obtain economic benefits from the activities of the applicant;(b)"relative" shall have the meaning assigned to it in section 6 of the Companies Act, 1956;(c)persons shall be deemed to be "acting in concert" who, for a common objective or purpose of acquisition of shares or voting rights in excess of the percentage mentioned in this sub-section, pursuant to an agreement or understanding (formal or informal), directly or indirectly cooperate by acquiring or agreeing to acquire shares or voting rights in the banking company.Explanation 2. - For the purposes of this Act, joint venture means a legal entity in the nature of a partnership engaged in the joint undertaking of a particular transaction for mutual profit or an association of persons or companies jointly undertaking some commercial enterprise wherein all contribute assets and share risks.
