<div>The Reserve Bank of India (RBI) on Monday released the final guidelines for ‘on tap’ licensing of universal banks in the private sector. <br /><br />Based on the experience of licensing two universal banks in 2014 and that of granting in-principle approvals for small finance banks and payments banks, RBI had released the draft guidelines for ‘on tap’ licensing of universal banks in the private sector on May 5, 2016.<br /><br />Existing non-banking financial companies (NBFCs) that have a successful track record for at least 10 years will be eligible to convert into a bank or promote a new bank. However, any NBFC, which is a part of the group that has total assets of Rs 5,000 crore or more and that the non-financial business of the group accounts for 40% or more in terms of total assets in terms of gross income, is not eligible, according to the guidelines.<br /><br />Individuals or professionals who are residents having 10 years of experience in banking and finance at a senior-level would be eligible to promote banks, singly or jointly, the guidelines state.<br /><br />The final guidelines have made it non mandatory to set up a Non-Operative Financial Holding Company (NOFHC) in some cases, besides relaxing norms on the promoter holding in the NOFHC. <br /><br />“NOFHC has been made non-mandatory in case of promoters being individuals or standalone promoting or converting entities who or which do not have other group entities. Not less than 51% of the total paid-up equity capital of the NOFHC shall be owned by the promoter or promoter group, instead being wholly owned by the promoter group," the guidelines state.<br /><br />As stated in the draft guidelines, the final guidelines have also excluded large industrial houses from the ambit of those who can apply but has given some leeway to private sector companies to be eligible. <br /></div>
<div>The Reserve Bank of India (RBI) on Monday released the final guidelines for ‘on tap’ licensing of universal banks in the private sector. <br /><br />Based on the experience of licensing two universal banks in 2014 and that of granting in-principle approvals for small finance banks and payments banks, RBI had released the draft guidelines for ‘on tap’ licensing of universal banks in the private sector on May 5, 2016.<br /><br />Existing non-banking financial companies (NBFCs) that have a successful track record for at least 10 years will be eligible to convert into a bank or promote a new bank. However, any NBFC, which is a part of the group that has total assets of Rs 5,000 crore or more and that the non-financial business of the group accounts for 40% or more in terms of total assets in terms of gross income, is not eligible, according to the guidelines.<br /><br />Individuals or professionals who are residents having 10 years of experience in banking and finance at a senior-level would be eligible to promote banks, singly or jointly, the guidelines state.<br /><br />The final guidelines have made it non mandatory to set up a Non-Operative Financial Holding Company (NOFHC) in some cases, besides relaxing norms on the promoter holding in the NOFHC. <br /><br />“NOFHC has been made non-mandatory in case of promoters being individuals or standalone promoting or converting entities who or which do not have other group entities. Not less than 51% of the total paid-up equity capital of the NOFHC shall be owned by the promoter or promoter group, instead being wholly owned by the promoter group," the guidelines state.<br /><br />As stated in the draft guidelines, the final guidelines have also excluded large industrial houses from the ambit of those who can apply but has given some leeway to private sector companies to be eligible. <br /></div>
