RBI to finalise draft guidelines for new banks next week
17 Aug 2011
The RBI is expected to issue draft guidelines on promoter holding and foreign equity for setting up new banks in the country by next week
While the RBI and the finance ministry are widely believed to have agreed on keeping out big industrial houses, foreign equity in new banks is also likely to be limited to a maximum 49 per cent, at least for the initial 10 years.
It is, however, not yet clear whether big corporates like Tatas, Mahindras, ADAG, AV Birla Group and L&T who are eagerly looking to enter the banking sector, will be kept out of the race. It is also not clear whether financial service providers such as Indiabulls, Religare, Shriram Finance and Srei with cross-holdings in group firms would be allowed to set up banks.
RBI is also expected to fix Rs1,000 crore as the minimum capital requirement for new banks.
Financial institutions have a clear chance and institutions like the IFCI could look forward to getting licences to set up new banks.
RBI and the finance ministry have for long been engaged in discussing the issue and the draft guidelines are expected to clear the decks for issue of licences to new banks.
