India's cabinet approved on Thursday the introduction of legislation in parliament that would allow investors to buy more shares in the subsidiaries of State Bank of India, the country's largest bank.
Shares in SBI, which owns between 75 and 100 percent of its seven "associate" banks, jumped 2.8 percent to 974.70 rupees, while its three listed subsidiaries rose between 5 and 20 percent - the most allowed for each respective share in a day.
A finance ministry official said the act would allow SBI to cut stakes in the associates to 51 percent from a 55 percent limit now and raise the voting rights cap for their shareholders to 10 percent from 1 percent. A cap on individuals holding no more than 200 shares in the subsidiaries would also go, he added.
SBI's unlisted associates are State Bank of Hyderabad, State Bank of Indore, State Bank of Patiala and State Bank of Saurashtra.
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