MUMBAI, Feb 23: The Reserve Bank of India (RBI) has allowed corporate houses to enter the banking sector.
According to the guidelines relaesed yesterday, entities or groups in the private sector, entities in public sector and Non-Banking Financial Companies (NBFCs) will now be eligible to set up a bank through a wholly-owned Non-Operative Financial Holding Company (NOFHC).
RBI has not excluded companies or entities from any specific industry applying for a new bank licence. However, in a draft rule issued last year, the central bank had excluded companies in the real-estate and broking firms applying for the new bank licences.
According to these guidelines, entities or groups will be
required to have a past record of sound credentials and integrity.
The companies should be financially sound with a successful track record of 10 years. For this purpose, the banking regulator may seek feedback from other regulators and enforcement and investigative agencies.
While applying for a banking license, the NOFHC should be wholly owned by the Promoter / Promoter Group. The bank can later get its shares listed on the stock exchanges within three years of
the commencement of business by the bank.
RBI said it will allow applications for new bank licences until July 1, 2013. No new Indian bank has been formed since Yes Bank in 2004. RBI has also set 49 percent cap on foreign holding in new banks and minimum paid-up equity capital at Rs 500 crore. (UNI)
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