Companies will have to wait for banking foray - Hindustan Times
close_game
close_game

Companies will have to wait for banking foray

Hindustan Times | By, New Delhi
Jun 03, 2013 09:05 PM IST

The in-principle approval for setting up of new banks will now be valid for 18 months.

The companies, which are looking to get banking licences from the Reserve Bank of India (RBI) will have to wait till the end of 2014. The banking sector regulator on Monday extended the validity of in-principle approval for new banks to 18 months from one year in order to provide more time for smooth transition and to meet regulatory requirements to companies to set up banks.

HT Image
HT Image

“RBI has been requested to clarify as to whether it would provide more time for a smooth transition from the existing structures to that prescribed in the guidelines as also for meeting the regulatory requirements,” said the central bank in clarifications issued relating to banking licences. “It has, therefore, been decided to extend the validity period of the in-principle approval from one year to 18 months.”

Hindustan Times - your fastest source for breaking news! Read now.

The RBI issued guidelines in February allowing any type of company to set up a bank in India paving the way for a new set of private banks. RBI said that applicants must take approval from other regulators to bring in entities regulated by them under the bank holding company. It had also said private companies and public sector entities with sound credentials, Rs 500 crore capital and a minimum track record of 10 years would be allowed to enter the banking business.

The central bank also said applicants must have public shareholding of at least 51%. For conglomerates, only non-financial services companies and non-operative financial holding companies will be allowed to hold shares of the bank holding company.

‘Everyone may not get permits’

Making it tougher for aspirants, the Reserve Bank said it will look for very high quality applications to issue new bank permits and may not be possible to issue licences to all eligible applicants.

“There is no predetermined number. RBI will be very selective while considering the applications for new bank licences. It will look for very high quality applications,” the RBI said “It may, therefore, be not possible to issue licence to all the applicants meeting the eligibility criteria.” PTI

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On