law: Banking Regulation Act, 1949
  19. Restriction on nature of subsidiary
  
  companies
  (1) A banking company shall not form any
  
  subsidiary company except a subsidiary company formed for one or more of the
  
  following purposes, namely.-
  (a) the undertaking of
  
  any business which, under clause (a) to (o) of sub-section (1) of section 6, is
  
  permissible for a banking company to undertake, or
  (b) with the previous
  
  permission in writing of the Reserve Bank, the carrying on of the business of
  
  banking exclusively outside India , or
  (c) the undertaking of
  
  such other business, which the Reserve Bank may, with the prior approval of the
  
  Central Government, consider to be conducive to the spread of banking in India
  
  or to be otherwise useful or necessary in the public interest.
  Explanation : For the purpose of section 8, a
  
  banking company shall not be deemed, by reason of its forming or having a
  
  subsidiary company, to be engaged indirectly, in the business carried on by
  
  such subsidiary company.]
  (2) Save as provided in sub-section (1), no
  
  banking company shall hold shares in any company, whether as pledgee, mortgagee
  
  or absolute owner, of an amount exceeding thirty per cent of the paid-up share
  
  capital of that company or thirty per cent of its own paid-up share capital
  
  under reserves, whichever is less:
  PROVIDED that any banking company which is on
  
  the date of the commencement of this Act holding any shares in contravention of
  
  the provisions of this sub-section shall not be liable to any penalty therefor
  
  if it reports the matter without delay to the Reserve Bank and if it brings its
  
  holding of shares into conformity with the said provisions within such period,
  
  not exceeding two years, as the Reserve Bank may think fit to allow.
  (3) Save as provided in sub-section (1) and
  
  notwithstanding anything contained in sub-section (2), a banking company shall
  
  not, after the expiry of one year from the date of the commencement of this
  
  Act, hold shares, whether as pledge, mortgagee or absolute owner, in any company
  
  in the management of which any Managing Director or Manager of the banking
  
  company is in any manner concerned or interested.