Results 1 to 11 of 11

Thread: India poised to issue bank licences to corporate players

  1. #1
    The Lone Ranger Lieutenant General rishabhd's Avatar
    Join Date
    Jun 2009
    Location
    delhi
    Posts
    67,558
    Rep Power
    97

    Default India poised to issue bank licences to corporate players

    Indian companies from any business sector will be allowed to seek entry to the country's the banking industry as the government looks to bring banking services to the large proportion of the population without bank accounts.

    The Reserve Bank of India (RBI) on Friday announced rules that would allow any type of company to apply for a banking licence, paving the way for India's first new banks since the formation of Yes Bank in 2004.

    Draft rules issued in 2011 had barred companies in the property and brokerage industries from applying, and disagreement between the central bank and finance ministry over exclusions had slowed the release of the final rules.

    Some critics, including the International Monetary Fund, had also voiced concern over the possibility of new banks issuing potentially risky loans to their related companies.

    However, the final rules on Friday did not make any particular exclusions.

    The move to issue new bank licences is intended to increase competition and bring fresh capital to an industry dominated by state lenders and reaches only about half of Indian households. Newly licenced banks will be required to open 25 per cent of their branches in rural areas that lack banking services.

    "India has a huge population of unbanked ... and the real concern is financial inclusion," said Rupa Rege Nitsure, chief economist at Bank of Baroda.


    At least 10 companies, mostly from the financial services sector, are expected to apply for licences. L&T Finance, part of construction and infrastructure conglomerate Larsen & Toubro Ltd, and billionaire Anil Ambani's Reliance Capital are among those that have said they are keen to apply.

    The RBI will allow applications until July 1 and successful applicants have a year to set up a bank. New banks must make a stock market listing within three years — one year longer than had been proposed in the draft rules.

    The RBI said licences will be issued on a "very selective basis" to applicants with "an impeccable track record".

    The rules are intended to ring-fence a company's regulated financial services operations from the rest of the group, the RBI said on Friday.

    "What is good is that the RBI has put in a lot of checks and balances. The exposure norms they have defined have taken care of all the risks that people would have been worried about," said Naresh Makhijani, executive director at KPMG.

    Religare Enterprises Ltd, Aditya Birla Financial Services and Mahindra Financial Services all said on Friday that they plan to apply for licences.
    Wo Acha Hay Tou Behtar, Bura Hay Tou Bhi Qabool
    Mizaaj-E-Ishq Mein Aib-O-Hunar Dekhe Nahi Jatay...!!!


  2. #2
    SB Guru Major
    Join Date
    Oct 2006
    Posts
    5,408
    Rep Power
    69

    Default

    Every big business house will have its own bank.
    ............retired.

  3. #3
    Hum Banarasi.......... Colonel Ankhi_sena_mun's Avatar
    Join Date
    Aug 2009
    Location
    Dheer sameere, Tatini Teere....
    Posts
    14,436
    Rep Power
    64

    Default

    it is ok...... as long as they dont start banking themselves....... meaning putting bank money into their own failing companies........
    mods decision: any insult to female members will be ignored as the person doing this is somebody known to the mods
    I PROTEST

  4. #4
    Rainbow chaser Brigadier General 007RIKY's Avatar
    Join Date
    Dec 2011
    Location
    Looking for one
    Posts
    28,848
    Rep Power
    59

    Default

    I don't get this, at one side they are planing to merge the PSU banks, & on other side new one's too..........
    We never see our real face

    It's only images or reflection what we see.

  5. #5
    SB Guru Major
    Join Date
    Oct 2006
    Posts
    5,408
    Rep Power
    69

    Default

    Quote Originally Posted by 007RIKY View Post
    I don't get this, at one side they are planing to merge the PSU banks, & on other side new one's too..........
    Main point in merging PSU banks was to merge banks who have strong hold in different region. Like a bank which is strong hold in south to merge in bank strong in North or West.
    Other thing was many PSU banks were opened at a place which is not that developed. Hence, the banking capacity is underutilized. PSU banks can't close the branch also can't remove the staff, they have bear the loss of inefficient branch. If merged, they can move the staff to other places by closing one branch.
    But, presently the plan of merger is not on agenda of Govt.
    ............retired.

  6. #6
    Rainbow chaser Brigadier General 007RIKY's Avatar
    Join Date
    Dec 2011
    Location
    Looking for one
    Posts
    28,848
    Rep Power
    59

    Default

    Quote Originally Posted by Roger69 View Post
    Main point in merging PSU banks was to merge banks who have strong hold in different region. Like a bank which is strong hold in south to merge in bank strong in North or West.
    Other thing was many PSU banks were opened at a place which is not that developed. Hence, the banking capacity is underutilized. PSU banks can't close the branch also can't remove the staff, they have bear the loss of inefficient branch. If merged, they can move the staff to other places by closing one branch.
    But, presently the plan of merger is not on agenda of Govt.
    It is, IDBI along with BOB is in pipeline
    We never see our real face

    It's only images or reflection what we see.

  7. #7
    SB Guru Major
    Join Date
    Oct 2006
    Posts
    5,408
    Rep Power
    69

    Default

    Quote Originally Posted by 007RIKY View Post
    It is, IDBI along with BOB is in pipeline
    Check the latest News about it. I think the proposal is 10 year old.

    5-6 years ago, the proposal of merger of Union Bank and Bank of India was also in consideration, later dropped.
    ............retired.

  8. #8
    Rainbow chaser Brigadier General 007RIKY's Avatar
    Join Date
    Dec 2011
    Location
    Looking for one
    Posts
    28,848
    Rep Power
    59

    Default

    Quote Originally Posted by Roger69 View Post
    Check the latest News about it. I think the proposal is 10 year old.

    5-6 years ago, the proposal of merger of Union Bank and Bank of India was also in consideration, later dropped.
    heard from a bank employee..
    We never see our real face

    It's only images or reflection what we see.

  9. #9
    SB Guru Major
    Join Date
    Oct 2006
    Posts
    5,408
    Rep Power
    69

    Default

    Quote Originally Posted by 007RIKY View Post
    heard from a bank employee..
    Search google. you will get latest News of year 2002. At that time there was proposal to merge IDBI with either BOB, PNB or Canara Bank. No development after that, reason is bank employees opposing and economic growth after 2003-04, which helped banks to grow.
    e. g. Bank like Indian Overseas Bank (HO Chennai), which had 4-5 branches in Maharashtra 5 years ago (excluding Mumbai) has acquired one co-op bank and opened many branches, there presence is at about 20-25 places, same with many other banks.
    ............retired.

  10. #10
    Rainbow chaser Brigadier General 007RIKY's Avatar
    Join Date
    Dec 2011
    Location
    Looking for one
    Posts
    28,848
    Rep Power
    59

    Default

    Quote Originally Posted by Roger69 View Post
    Search google. you will get latest News of year 2002. At that time there was proposal to merge IDBI with either BOB, PNB or Canara Bank. No development after that, reason is bank employees opposing and economic growth after 2003-04, which helped banks to grow.
    e. g. Bank like Indian Overseas Bank (HO Chennai), which had 4-5 branches in Maharashtra 5 years ago (excluding Mumbai) has acquired one co-op bank and opened many branches, there presence is at about 20-25 places, same with many other banks.
    That I know, but what he said that talks has started again.

    May be that a rumor too.
    We never see our real face

    It's only images or reflection what we see.

  11. #11
    The Lone Ranger Lieutenant General rishabhd's Avatar
    Join Date
    Jun 2009
    Location
    delhi
    Posts
    67,558
    Rep Power
    97

    Default ‘RBI may give maximum 5 new bank licences’

    The Reserve Bank may not issue more than five new bank licences as the central bank wants to be very selective initially, analysts said.

    "We do not expect the RBI to issue more than five licences. We believe the probability of a public sector entity obtaining a banking licence is low," Standard Chartered said in a report.

    RBI has discouraged groups with high broking or realty revenues from applying, it said.

    Bank of America Merrill Lynch is also of the view that RBI may initially give out 4-5 new bank licences even as restrictions on real estate or brokerage business have been removed in the final guidelines.

    "We do think the new set of banks (post RBI licences) will find it more difficult to grab market shares in the same manner as the current private banks are aggressive and also employ the best technology," Bank of America Merrill Lynch said.

    However, state-owned banks could see a very meaningful fall in market shares over the medium or long term, as they are likely to be more capital constrained, especially, post Basel 3, and at least half of them will also find it hard to compete on service or customer retention, it said.

    Another US-based investment banker Goldman Sachs said the pool of eligible applicants may be limited as the RBI will be cautious in giving out new licences.

    "In view of the increasing emphasis on stringent prudential norms, transparency, disclosure requirements and modern technology, banks need to have strength and efficiency to work profitably in a highly competitive environment," RBI said in the guidelines for the new bank licence issued last week.

    "Banking being a highly leveraged business, licences shall be issued on a very selective basis to those who conform to the above requirements, who have an impeccable track record and who are likely to conform to the best international and domestic standards of customer service and efficiency," it said.

    As per the new norms, entities with a minimum track record of 10 years would be eligible for licence after clearance from sector regulators, enforcement, investigative agencies such as I-T Department, CBI and ED.

    The minimum paid-up capital for setting up a bank will be Rs 500 crore. The cap on the foreign investment, including FDI/FII and NRI, has been set at 49 percent.

    RBI has set a deadline of July 1 for filing application by interested entities.

    As per a report published by Deutsche Bank RBI guidelines for new bank licences allow everyone to apply, including ublic sector and real estate/broking entities. It has managed to keep conditions tight.
    Wo Acha Hay Tou Behtar, Bura Hay Tou Bhi Qabool
    Mizaaj-E-Ishq Mein Aib-O-Hunar Dekhe Nahi Jatay...!!!


Similar Threads

  1. Corporate India's Inheritors
    By sheikh in forum General Discussion
    Replies: 25
    Last Post: 02-03-2012, 08:31 PM
  2. Corporate spying in India: The tools they use
    By rishabhd in forum General Discussion
    Replies: 17
    Last Post: 13-06-2011, 11:38 PM
  3. Replies: 10
    Last Post: 11-06-2011, 01:22 PM
  4. India to get its first Islamic bank
    By rishabhd in forum General Discussion
    Replies: 142
    Last Post: 08-02-2011, 05:38 PM
  5. Ingrid Vandebosch - SI Swimsuit Issue 2008 Players' Wives
    By !! K A R A N !! in forum International Celebrities
    Replies: 11
    Last Post: 30-01-2010, 12:44 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •