RBI panel proposes to raise promoters cap to 26 pc in pvt banks


PTI, Nov 20, 2020, 5:24 PM IST

Mumbai: An internal working group set up by the RBI has proposed to raise the cap on promoters’ stake in private banks from the current 15 per cent to 26 per cent in 15 years.

The group has also recommended that large corporate or industrial houses may be allowed as promoters of banks only after amendments to the Banking Regulation Act and strengthening of the supervisory mechanism for conglomerates, including consolidated supervision.

The Reserve Bank of India had constituted the internal working group (IWG) on June 12, 2020, to review extant ownership guidelines and corporate structure for Indian private sector banks. The central bank released the groups” report on Friday.

The terms of reference of the IWG inter alia included a review of the eligibility criteria for individuals/entities to apply for banking license; examination of preferred corporate structure for banks and harmonisation of norms in this regard; and review of norms for long-term shareholding in banks by the promoters and other shareholders.

On eligibility of promoters, it said large corporate/industrial houses may be allowed as promoters of banks only after necessary amendments to the Banking Regulations Act, 1949 to deal with connected lending and exposures between the banks and other financial and non-financial group entities.

It also made a case for the strengthening of the supervisory mechanism for large conglomerates, including consolidated supervision.

The panel also suggested well run large non-banking finance companies (NBFCs) with an asset size of Rs 50,000 crore and above, including those owned by a corporate house, may be considered for conversion into banks – subject to completion of 10 years of operations.

It recommended the minimum initial capital requirement for licensing new banks should be enhanced from Rs 500 crore to Rs 1,000 crore for universal banks and from Rs 200 crore to Rs 300 crore for small finance banks.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Sindhu wins Syed Modi International badminton title

UK lawmaker claims she was fired over her Muslim faith

Netaji’s statue to be relocated to front side of Vidhana Soudha: CM

Bengaluru: Man arrested for stealing bikes and gifting them to relatives

Sanitary napkins provided to boys in Bihar school

Karnataka achieves 100 pc first dose COVID vaccine coverage: Min Sudhakar

India’s R-value further reduces, COVID-19 peak likely in next 14 days: IIT analysis


Related Articles More

NAEC seeks govt intervention in containing high cost of cotton yarn, fabrics to boost exports

Global trends, quarterly earnings major drivers for equity market this week: Analysts

India’s economy has some bright spots, a number of very dark stains: Raghuram Rajan

Travel agents body TAAI seeks ‘One India One Tourism’ approach in Budget

Jio completes 5G coverage plans for top 1,000 cities in country

MUST WATCH

THIEF FALLS OFF FROM THE BUILDING WHILE ESCAPING

King Cobra Rescue in Sringeri

Malnad Gidda Desi Cow Dairy Farming

‘Car’bar with Pramod Madhwaraj | Episode 3

NEWS BULLETIN 22-01-2022


Latest Additions

Sindhu wins Syed Modi International badminton title

Amarinder Singh announces first list of 22 candidates, former India hockey captain Ajit Pal to contest from Nakodar

UK lawmaker claims she was fired over her Muslim faith

106 deaths in Delhi in January due to cold, claims NGO; Officials deny

Netaji’s statue to be relocated to front side of Vidhana Soudha: CM

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.