1. Companies Act does not apply

Amalgamation of banking companies is governed by section 44A of the Banking Regulation Act, 1949; the provisions of Companies Act 2013 do not apply. The entire process is monitored by the Reserve Bank of India (RBI).

2. Shareholder Meeting must be convened

After the board approves the proposal, the approval of the shareholders must be secured at an extraordinary general meeting (EGM). The resolutions need to be passed by the shareholders by a two-third majority (by value) and by a 50% majority (in number).

3. Voting rights are restricted

The Banking Regulations cap an individual's voting rights in a bank to 10%. Hence, even if the promoters own more than 10% of the equity, they will not be permitted to vote on those excess shares. This implies that public shareholders have more voting power in such schemes, as compared to general schemes of arrangement.

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