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Clarifications to Queries on Guidelines for Licensing of New Banks in the Private Sector
A. The bank would be required to open at least25 per cent of its branches in unbanked rural centres [Paragraph 2 (K) (vii) of the guidelines]. This would mean that out of the total number of branches, the bank opens in the first year of operation by setting up new branches and by converting the existing branches of NBFCs into bank branches as permitted by RBI [paragraph 2 (L) of the guidelines], 25 per cent of branches have to be in unbanked rural centres. This rule would apply in every subsequent year.
It is clarified that as per the extant policy no single entity or group of related entities, other than the NOFHC, shall have shareholding or control, directly or indirectly, in excess of 10 per cent of the paid-up voting equity capital of the bank. In the context of the amendments to the Banking Regulation Act, 1949, the issue of raising the voting rights from 10 per cent to 26 per cent in phases will be considered as and when necessary and will be notified separately. [Paragraph 2 (K) (iii) of the guidelines]
It is clarified that as per the extant policy no single entity or group of related entities, other than the NOFHC, shall have shareholding or control, directly or indirectly, in excess of 10 per cent of the paid-up voting equity capital of the bank. In the context of the amendments to the Banking Regulation Act, 1949, the issue of raising the voting rights from 10 per cent to 26 per cent in phases will be considered as and when necessary and will be notified separately. [Paragraph 2 (K) (iii) of the guidelines]
No. The Business Correspondents (BCs) by definition are banks’ agents, and not their employees.
No. The Business Correspondents (BCs) by definition are banks’ agents, and not their employees.
The Promoters/Promoter Groups of banks may draw up their plan for financial inclusion, by adopting BC/ICT model, in addition to the branches. The new bank may undertake door step banking to the extent and in the manner provided in the guidelines issued vide RBI circulars DBOD. No.BL.BC.59/22/22.01.010/2006-207 dated February 21, 2007 and DBOD. No. BL. BC.99/22.01.010/2006-07 dated May 24, 2007.
The Promoters/Promoter Groups of banks may draw up their plan for financial inclusion, by adopting BC/ICT model, in addition to the branches. The new bank may undertake door step banking to the extent and in the manner provided in the guidelines issued vide RBI circulars DBOD. No.BL.BC.59/22/22.01.010/2006-207 dated February 21, 2007 and DBOD. No. BL. BC.99/22.01.010/2006-07 dated May 24, 2007.
A. Yes. The Promoters/Promoter Group of a housing finance company(HFC) regulated by NHB desiring to promote a bank or convert the HFC into a bank will have to comply with the additional conditions stipulated at paragraph 2(L) of the guidelines.
The bank shall have initial voting equity shares of ` 5 billion. For this purpose, the amount in the share/securities premium account will not be counted. However, in case of conversion of an NBFC into a bank, the bank shall have at all times a minimum networth of ` 5 billion. [Paragraph 2(D)(i) and 2(L)(b)&(c) of the guidelines]
The bank shall have initial voting equity shares of ` 5 billion. For this purpose, the amount in the share/securities premium account will not be counted. However, in case of conversion of an NBFC into a bank, the bank shall have at all times a minimum networth of ` 5 billion. [Paragraph 2(D)(i) and 2(L)(b)&(c) of the guidelines]
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Page Last Updated on: December 11, 2022
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