JOIN USThe Reserve Bank of India (RBI) will issue clarifications on Monday (June 3) against queries sent by different parties in respect of new private banking licence.
It may be recalled that the apex bank had issued guidelines for issuing licences for new banks on February 22, 2013, subsequent to which it received several queries seeking clarification on the guidelines. “To comprehensively reply all queries, RBI issued a press release on March 7, 2013 asking that queries on the guidelines may be sent to the Reserve Bank by April 10, 2013 and that clarifications would be posted on its website on June 03, 2013,” it said on Friday.
Entities both from private and public sectors shall be eligible to set up a bank through a wholly-owned non-operative financial holding company (NOFHC). A business group, which is keen on applying for a license should have a minimum paid up equity capital of Rs 500 crore, according to RBI guidelines. At the start of banking operations, the NOFHC should hold a minimum of 40 per cent of the equity capital of the bank with a lock-in period of five years. Later, it has to be brought down to 15 per cent within 12 years from that onwards.
The banking regulator had put a strict condition of having 25 per cent of its branches in unbanked rural areas with population upto 9,999. Many believe, for a new banking entity, it will be stumbling block as the brick and mortar model especially in rural areas take time to turn profitable.