RBI releases Discussion Paper on Entry of New Banks in the Private Sector

Microfinance Focus, August 15, 2010: Indian Apex bank, The Reserve Bank of India released on its website, the Discussion Paper on “Entry of New Banks in the Private Sector”. The paper seeks views/comments of banks, non-banking financial institutions, industrial houses, other institutions and the public at large.

Suggestions and comments are invited on the following aspects delineated in the Discussion Paper:

• Minimum capital requirements for new banks and promoters contribution
• Minimum and maximum caps on promoter shareholding and other shareholders
• Foreign shareholding in the new banks
• Whether industrial and business houses could be allowed to promote banks
• Should Non-Banking Financial Companies be allowed conversion into banks or to promote a bank
• Business model for the new banks

Suggestions and comments may please be sent by September 30, 2010. After receiving feedback, comments and suggestions on the possible approaches discussed in this paper and detailed discussions with the stakeholders, comprehensive guidelines for licensing of new banks would be framed and applications invited for setting up new banks.

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Suggestions and comments may please be sent by September 30, 2010 to the Chief General Manager, Reserve Bank of India, Department of Banking Operations and Development, Central Office, 5th floor, World Trade Centre-1, Cuffe Parade, Mumbai-400005 or emailed.

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