RBI releases clarifications on guidelines for new private banks
03 June 2013
The Reserve Bank of India (RBI) today released clarifications to queries on the guidelines for licensing of new banks in the private sector.
RBI had, on 22 February, issued guidelines for licensing of new banks in the private sector, and followed it up with a press release on 7 March 2013 inviting queries from intending applicants seeking clarifications on the guidelines.
RBI said it has received a total of 443 queries from 34 individuals/organisations up till now and has issued clarifications to all the queries, while it has clubbed a few queries with other related queries for the sake of clarity and continuity.
A good number of queries have brought out issues relating to the provisions in the guidelines on the eligible promoters, 'fit and proper' criteria, corporate structure of the non-operative financial holding company (NOFHC), foreign shareholding and on transition time to the new structure. While interpreting the replies, it must be kept in view that though the replies are specific to the questions, these must be seen in the wider context of the guidelines.
As per the guidelines for licensing of new banks in the private sector issued on 22 February 2013, the validity of the in-principle approval for setting up of the NOFHC / bank was one year from the date of issue and would lapse automatically, thereafter.
It has since been decided to extend the validity period of the in-principle approval from one year to 18 months. Accordingly, the provisions of the guidelines stand modified.