The Reserve Bank of India has decided to issue clarifications on queries raised by intending applicants on the final guidelines for licensing new banks in the private sector.
The central bank, in a statement, said: “Considering that the clarifications sought would be of wider interest and use for all intending applicants, clarifications will be posted on its Web site.”
Potential applicants can send their queries to the central bank by April 10. The RBI assured that the identity of those who raise queries would be kept confidential.
On February 22, the RBI unveiled the final guidelines for setting up new banks in the private sector. The guidelines come three years after the then Finance Minister Pranab Mukherjee announced that the RBI is considering giving some additional banking licences to private sector players.
In the final guidelines, the central bank has accommodated the Government’s viewpoint and reversed the stand it had taken in the draft guidelines of not allowing broking and real-estate companies in the banking space.
The RBI said entities in the private sector, public sector and non-banking finance companies (NBFCs) will be eligible to set up a bank. Eligible NBFCs could be permitted to promote a new bank or convert themselves into banks.
Eligible promoters will have to make an application to the RBI by July 1, 2013. Entities/groups which intend to float a bank will have to set it up through a wholly-owned non-operative financial holding company (NOFHC), which will be registered as a non-banking finance company.
The riders
The RBI, however, has given itself some wiggle room to reject applications. It said the promoter’s business model and business culture should not be misaligned with the banking model.
Among others, the players which are expected throw their hat in the ring to get banking licences are: L&T Finance Holdings, Tata Capital, Aditya Birla Financial Services, Reliance Capital, LIC Housing Finance, Mahindra & Mahindra Financial Services, Religare Enterprises, and Indiabulls.
beena.parmar@thehindu.co.in