ibnlive » India

Promoters will get 18 months to open branches: RBI

Press Trust of India
Jun 04, 2013 at 01:21am IST

Mumbai: The central bank on Monday said the entities getting licences to open new banks will be given 18 months to open branches against 12 months prescribed earlier, and promoters would have to transfer their holdings to the non-operative financial holding company (NOFHC) in a stipulated period. "It has been decided to extend the validity period of the in-principle approval from one year to 18 months... to provide sufficient time for promoters to open branches and comply with various stipulations in the guidelines issued on February 22," the Reserve Bank said in a circular issued today in response to over 440 clarificatory questions it received from prospective licence seekers.

The bank said that most of the queries it received pertained to provisions on eligible promoters, 'fit and proper' criteria, foreign shareholding, on transition time to the new structure and corporate structure of the NOFHC among others. The NOFHC envisages holding of the bank and other regulated financial services entities of the promoters under the NOFHC and prudential exposure norms for the regulated entities. On questions regarding the holding and capital structure of the NOFHC, the RBI said it is not necessary that individual along with his related parties have shareholding in the NOFHC.

However, if any individual belonging to the promoter group chooses to become a promoter of the NOFHC, he cannot hold more than 50 per cent of the voting equity shares and can hold voting equity shares not exceeding 10 per cent of the total voting equity shares of the NOFHC. It also admitted that since the NFOHC requirements overlap with regulatory norms prescribed by other sectoral regulators like Sebi and Irda, the issues were examined in consultation with SEBI and IRDA and it was decided that while the structure prescribed in the guidelines would be the preferred structure, the intending applicants should approach the other financial sector regulators for bringing the entities regulated by them under the NOFHC.

Promoters will get 18 months to open branches: RBI

RBI said it is not necessary that individual along with his related parties have shareholding in the NOFHC.

The central bank said it received 443 queries from 34 individuals/organisations. As of March 31, it had received 71 queries from nine individuals/ organisations. As many as 330 queries came from 19 individuals/organisations between April 5 and 10, out of which 240 came in from 10 individuals/organisations on April 10, the last date, and 42 queries came in after the last date, the bank said.

Latest

More from this section

PREVIOUS  Greater Noida: Divers recover 25-year-old youth's body from canal

NEXT  Four persons gangrape a girl in a moving autorickshaw