Giving respite to Non-banking finance companies (NBFCs) waiting for banking licences, the Resserve Bank of India (RBI) Deputy Governor K C Chakrabarty said that NBFCs have advantage over other applicants for banking licences as they already have good customer base. Meanwhile, Chakrabarty added that a separate committee has been appointed to award licences and is considering various factors to choose appropriate applications for new banking licences.
The central bank has received 26 applications for new banking licence including NBFCs and various large corporates such as Tata Group, Reliance Capital and L&T Finance among others. Earlier, in February, the RBI issued final guidelines that would govern the new set of proposed banks. As per the guidelines, banks should have a minimum equity capital of around Rs 5 billion and not have foreign ownership of more than 49% for the first five years of operation. The rules also require that one out of every four branches opened by the new banks should be located in rural areas.
The government has planned to enhance the penetration level of Indian banking industry as it plays an important role in the economic development of the country and is the most dominant segment of the financial sector. Banks help channel savings to investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns. The Indian banking industry’s contribution to GDP moves along with growth in the Indian economy.
The central bank has received 26 applications for new banking licence including NBFCs and various large corporates such as Tata Group, Reliance Capital and L&T Finance among others. Earlier, in February, the RBI issued final guidelines that would govern the new set of proposed banks. As per the guidelines, banks should have a minimum equity capital of around Rs 5 billion and not have foreign ownership of more than 49% for the first five years of operation. The rules also require that one out of every four branches opened by the new banks should be located in rural areas.
The government has planned to enhance the penetration level of Indian banking industry as it plays an important role in the economic development of the country and is the most dominant segment of the financial sector. Banks help channel savings to investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns. The Indian banking industry’s contribution to GDP moves along with growth in the Indian economy.
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