RBI norms: No bank licences for large corporates yet

1 year ago 287

The cardinal slope has besides not accepted a proposal to let well-run, ample NBFCs, including those owned by a firm house, to go banks. Both suggestions, it said, connected Friday, are “under examination”.

However, RBI has allowed promoters to clasp   a 26% shareholding successful  banks, higher than the existent   headdress  of 15%, bringing alleviation  to bankers similar  Kotak Mahindra Bank’s Uday Kotak.However, RBI has allowed promoters to clasp a 26% shareholding successful banks, higher than the existent headdress of 15%, bringing alleviation to bankers similar Kotak Mahindra Bank’s Uday Kotak.

Reserve Bank of India (RBI) has refrained from permitting firm ownership of banks, putting connected clasp a moving radical proposal that said ample firm and concern houses whitethorn beryllium allowed to beforehand banks station amendments to the Banking Regulations Act, 1949. The cardinal slope has besides not accepted a proposal to let well-run, ample NBFCs, including those owned by a firm house, to go banks. Both suggestions, it said, connected Friday, are “under examination”.

However, RBI has allowed promoters to clasp a 26% shareholding successful banks, higher than the existent headdress of 15%, bringing alleviation to bankers similar Kotak Mahindra Bank’s Uday Kotak. The 26% is successful enactment with the ceiling connected the voting rights of a shareholder and successful keeping with the existent FDI policy. The PJ Nayak Committee had successful 2014 recommended a promoter holding of 25%, connected the grounds that debased promoter shareholding could marque banks susceptible by weakening the alignment betwixt the absorption and shareholders.

Post the five-year lock-in, promoters tin take to little holdings to beneath 26%. In the archetypal five-year lock-in period, the promoter’s involvement indispensable beryllium a minimum of 40%.

RBI has simplified the ownership rules for non-promoter shareholders specifying a headdress of 15% for each categories of financiaI Institutions, supranational institutions, PSUs and the government. It has retained the headdress of 10% connected the shareholding of non-promoter shareholders who are earthy persons and non-FIs.

Though the preferred structure, an NOFHC (Non-mandatory Non-operative Financial Holding Company) volition beryllium mandatory lone wherever the idiosyncratic promoters, promoting and converting entities person different radical entities, provided these promoters and entities are eligible to acceptable up a Universal Bank oregon a Small Finance Bank (SFB). Banks that presently run nether an NOFHC tin dismantle it if they bash not person different radical entities successful their fold.

The archetypal minimum superior requirements for caller slope licences person been raised to `1,000 crore for a cosmopolitan slope from `500 crore astatine contiguous and `300 crore for an SFB from `200 crore.

Future SFBs indispensable beryllium listed wrong ‘six years from the day of reaching the nett worthy equivalent to the prevalent introduction superior request prescribed for cosmopolitan banks’ oregon ‘10 years from the day of commencement of operations’, whichever is earlier. The interior moving radical constituted connected June 12 past year, nether the chairmanship of PK Mohanty, director, cardinal committee of RBI, had submitted its study successful November 2020.

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