Relaxing the entry barrier, the Central bank is going to welcome the entry of new banks in the private sector, releasing banking licenses as per new and final guidelines, into the Rs.73 trillion banking sector.
The much long nine years waited decision has been coming since RBI issued the last round of licences.
The private sector, public sector and non-banking finance companies (NBFCs) will only be eligible entities to set up a bank as well as to promote through a non-operative financial holding company (NOFHC), RBI said.
A deadline for applications to be submitted is set 1 July by RBI along with minimum capital limit of Rs 500 crore, reports said. Even, exemption on the time-period has stipulated for listing from two years to three years from date of commencement of business.
With a power to giving the final nod to holding companies, RBI can dismiss a board. It has set the validity period for in-principle approval only for a year, sources said.
However, there will be a space for broking and real-estate companies as per revised draft guidelines, only if their business activities which are speculative in nature should not put the bank at risk.
Meanwhile, the race to get license has started and among those- the top most are IDFC, LIC Housing Finance, Mahindra & Mahindra Financial Services, Tata Capital, Aditya Birla Financial Services, Reliance Capital, Rural Electrification Corporation and Power Finance Corporation.
