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RBI may issue clarification on bank licences by early May

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rbi

It released guidelines for new bank licenses in Feb this year, asking aspirants to submit applications by July 1, 2013

RBI may issue clarification on bank licenses by early May. It released guidelines for new bank licenses in Feb this year, asking aspirants to submit applications by July 1, 2013. The Reserve Bank is likely to issue by early next month clarifications on new bank license guidelines as sought by interested entities, a senior RBI official has said.

“We have received queries from various entities. RBI will be posting on its website all the relevant clarifications with regard to new bank license guidelines by this month end or early next month so that they get ample time to file applications,” a senior RBI official said.

RBI released guidelines for new bank licenses in February this year, asking the aspirants to submit applications by July 1, 2013.

Many large business groups such as Anil Ambani-led Reliance Group, L&T, Mahindra, Birlas, Religare and Videocon have already made public their intentions to apply for the licenses, while many NBF C including Shriram group, Indiabulls, India Infoline, IFCI and PFC have also shown interest. Those reported to be interested in banking license also include Tatas and Mukesh Ambani-led RIL group.

However, the RBI is expected to follow a conservative approach and allow 4-5 new players in an already highly competitive banking sector.

Many aspirants have roped in former bank chiefs and other senior bankers from India and abroad as consultants to help them prepare for seeking the license. Interestingly, many real estate players have shown initial interest despite their financial positions not being entirely in adherence to the norms spelt out by the RBI.

After July 1, the last date of application for bank license, RBI will make public names of all the interested entities. RBI last gave bank licenses around a decade back.

Many clarifications could be relating to interpretation of various clauses of the new bank license norms, as many entities had complained of ‘ambiguity’ on various fronts in the guidelines.

The applicants from the NBFC space have also sought to know whether RBI would allow conversion of all their Tier-1 branches and locations into bank branches in case of the transfer of their existing activities into various banking functions.

They have sought to know what will happen to the Tier 1 branches that are not allowed to be converted to bank branches, sources said.

As per RBI’s guidelines, those eligible to apply for banking license include entities or groups in the private sector, entities in public sector and Non-Banking Financial Companies through a wholly-owned Non-Operative Financial Holding Company (NOFHC).

Clarifications have also been sought on the corporate structure of the NOFHC as well. RBI has said the NOFHC shall be wholly owned by the promoters and should hold the bank as well as all the other financial services entities of the group.

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Focus Turns to Hunt for Bombing Motive

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Task Force To Question Injured Teen

Investigators in the Boston Marathon bombing case shifted their focus Saturday to hunting for a motive and preparing charges after apprehending 19-year-old college student Dzhokhar Tsarnaev Friday night.

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Wisdom teaches you everything

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Sunrise
Theatre Of Life


Ignorance makes us believe that life functions haphazardly. Wisdom teaches you that everything that happens in this theater of life has profound significance. What we see today is not the fruit of chance, but a fruit from seeds planted in the past. Plant seeds of peace now and you will create a life of peace in the future
 

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Polls to help economy grow by 6.4% this fiscal: Goldman

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 inflation

Wall Street brokerage Goldman Sachs today projected an ‘above-consensus’ growth of 6.4 per cent for the current fiscal on factors like the upcoming general elections which, it said, will increase government spending, lower interest rates and lead to action on the policy front. 

“We reiterate our above-consensus GDP growth forecast of 6.4 per cent. The key to an improvement in activity is a pickup in the investment cycle,” it said in a report. It said higher government capex coupled with falling rates and policy reforms to ease bottlenecks and manufacturing export growth will drive investments during the ongoing fiscal. 

Yesterday, the UN pegged the calendar 2013 growth at 6.4 per cent, while the ADB last projected that the domestic economy would reach 6 per cent in the current fiscal. In the budget, the government had pegged growth at between 6.1 and 6.7 per cent. Rating agency Crisil had lowered its FY14 growth estimate to 6 per cent from the earlier 6.4 per cent earlier this week. 

Official estimates suggest the economy might have expanded 5 per cent in the recently concluded fiscal, the lowest in ten years. “The year before the elections is generally associated with increased government spending. Indeed, government spending (as a percentage of GDP) has increased the year before the elections, in each of the last four general elections,” it said. 

While stating this also increased the possibility of a higher fiscal deficit, it called it a “positive stimulus to the economy.” 

Crisil had cast doubts whether the government will be able to achieve its stated objective of reigning-in fiscal deficit at 4.8 per cent. Among other reasons cited include the expected lowering of interest rates by the RBI, besides a drive on the policy front to expedite projects. 

“Ongoing policy reforms to bottleneck infrastructure and other investments, particularly, the Cabinet Committee on Investments can help,” the Goldman Sachs report said. Additionally, other factors like the improvement in the global economic climate will also act as a “tailwind,” Goldman said. 

The report pointed out to data displaying some “green shoots” like that on the index of industrial production, exports, and non-food credit.

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Euro zone inflation continues to ease in March

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Eurozone Inflation

The annual rate of inflation in the euro zone fell further below the European Central Bank’s target level in March, official figures showed Tuesday.

The decline in upward pressures in consumer prices eases one impediment to monetary stimulus from the ECB to support the euro zone’s battered economy in coming months, and in theory makes households better off as inflation erodes less of their disposable income.

But not all countries are benefiting from the decline to the same degree. Inflation remained much higher than the average in Spain and the Netherlands in March, where falls in household incomes in real terms undermine the chances of an economic recovery.

Eurostat, the European Union’s statistics agency, said the annual rate of inflation in the 17 countries that use the euro fell to 1.7% in March from 1.8% in February, confirming an earlier estimate. The figure is the lowest since August 2010 and undercuts the ECB’s target level of a little under 2%.

The figure was in line with a forecast by economists in a Dow Jones Newswires poll last week.

Prices fell for transport fuel, telecommunications and medical services. Electricity prices rose.

The average rate masked big divergences between euro-zone member states.

Annual inflation was significantly higher than the average in the Netherlands, where the rate was 3.2% in March, and in Spain where it was 2.6%. Much lower rates of price growth were registered in Ireland, at 0.6%, and Portugal, at 0.7%. Greek consumer prices fell in year-to-year terms, by 0.2%.

Todays Thought – Harmonious Balance

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Harmonious Balance

We all know the old adage – what you give out you get back, or what goes around comes. But we forget this cast iron law which is found everywhere in the universe. The energy of life is constantly moving at physical, mental and spiritual levels. And if we stand back and just observe, we see it moving in the process of exchange. In the context of our relationships, we give and receive energy, and when we are truly giving and receiving positive energy there is harmony and balance. But when we do what we are taught to do, which is to take and to keep, then we destroy the harmony and the balance of our life. When we say possession is nine tenths of the law we give life to the illusion of ownership which blocks out the truth. It is possession itself which is our attempt to break the law, and it is that illusion which lies at the heart of all human pain, discomfort and disharmony. While many ‘things’ will come to us, we possess nothing. We intuitively acknowledge this when we say to each other, “You can’t take it with you when you go.” Can you?

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