Mumbai, Oct. 1 -- The Reserve Bank of India (RBI) has eased the approval process for mutual funds, insurance companies and pension funds looking to build up major shareholdings in banks. These investors can now obtain a one-time approval for subsequent acquisitions, rather than seeking the central bank's permission every time.

Under the earlier framework, anyone making an initial acquisition of a major shareholding in a bank needed prior RBI approval. If their aggregate shareholding, after the initial acquisition, fell below 5% at any point of time, prior RBI approval was again required before any subsequent acquisition of major shareholding.

The RBI has kept the prior-approval requirement for an initial acquisition, but mutual funds, i...