For commercial banks to float subsidiaries, approval from the Reserve Bank of India (RBI) may not remain mandatory, according to highly placed sources.
Most players will need to burn the midnight oil to meet the deadline for creating a bank as well as specific norms set by RBI.
Application deadline may be extended but no leeway on priority-sector targets.
Isn't it time to review the 'fit and proper' criteria for banking licence, particularly with reference to individuals applying for it, asks Tamal Bandyopadhyay?
A day after applying for a bank licence, Aditya Birla Group chairman Kumar Mangalam Birla on Wednesday said the new bank licence norms announced by the Reserve Bank are not discriminatory towards large corporate houses.
A senior official with Muthoot Finance said the group would also want to apply for a universal licence.
If indeed the gate opens for big industrial houses, the RBI needs to be smarter than them and demonstrate it through action, not reaction, observes Tamal Bandyopadhyay.
To allow applications for new bank licences until July 1, 2013.
The Reserve Bank on Friday accepted most of the recommendations of its working group on corporate ownership of private sector banks, by allowing unrestrained promoter shareholding in the first five years of operations and hiking the same to 26 per cent after 15 years from the extant 15 per cent and also the new capital requirements. The move will benefit leading banks like Kotak Mahindra Bank and IndusInd Bank, among others, which have been seeking more time from the regulator to divest their stakes for many years now. Accepting 21 of the 33 recommendations of the internal working group, the central bank said the remaining suggestions are under its consideration.
With the July 1 deadline to apply for bank licence fast approaching, aspirants are scrambling to meet the Reserve Bank of India's (RBI) eligibility criteria to apply.
The RBI will display names of applicants on its website.
The RBI working group's proposal to allow corporate houses to set up banks is a "bombshell" and at this juncture, it is more important to stick to the tried and tested limits on involvement of business houses in the banking sector, according to an article jointly written by former RBI Governor Raghuram Rajan and ex-Deputy Governor Viral Acharya. They also said that the proposal is "best left on the shelf".
On Monday, RBI announced that 26 entities, including Tata Sons, LIC Housing Finance, Aditya Birla Nuvo, Department of Posts, Reliance Capital, L&T Finance and Bajaj Finserv, applied for grant of bank licences.
Criterion for corporates will effectively rule out entry for business houses.
The niche banks - small finance and payments banks -have been set up to further the regulator's objective of deepening financial inclusion.
Members of Parliament, state legislatures, and local governments not eligible to be members of PSB boards
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This means individuals like Vikram Pandit, former Citibank chief, can be a promoter only if he comes back to the country permanently.
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