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.
Get free important share market ideas on stocks & nifty tips chart setups, analysis for the upcoming session, and more by joining the below link: Stock Tips
Are you looking for NSE paid calls? Want to get premium trading alerts and unlimited access to Moneymunch? Join today and start potentially multiplying your net worth: Premium Stock & Nifty Tips
Premium features: daily updates, full access to the Moneymunch #1 Rank List, Equity Research Reports, Focus List portfolio of 50 longer-term stocks, Premium screens, and much more. You will quickly identify which stocks to buy, which to sell and target today΄s hottest industries.
Have you any questions/feedback about this article? Please leave your queries in the comment box for answers.