New bank licences: the meaning of inclusion
By M.S. Sriram
The Reserve Bank of India (RBI) has issued final guidelines for new bank licences. It is time to reflect on what the new banks should achieve, including expectations on financial inclusion. While inclusion, articulated as the physical presence of banks in unbanked locations, is important, it glosses over exclusion in urban areas. In general, policy equates inclusion with poverty, rural areas, agriculture and small-ticket credit. As RBI examines the business plans and issues licences to new applicants, it should go beyond these generalized targets to look at some nuanced parameters. (Includes chart on Regional Disparity)
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Banking norms and PSU banks
By Ravi Krishnan
It is rather ironical that the finance ministry is pushing hard for new bank licences when state-owned banks are bearing the brunt of increased competition from the previous two rounds of bank licensing.
It’s a no-brainer that when the new entrants come in, the market share of existing firms takes a hit. But in banking, the firms which will tend to get hit more in terms of credit and deposit market share will be the public-sector banks. (Includes chart on Growth Trajectory)
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All fit candidates should be allowed to set up banks
By Tamal Bandyopadhyay
Almost three years after the Indian government announced its intention to open up the banking sector for a new set of private banks to expand banking services, the Reserve Bank of India (RBI) last week released the final guidelines on the licensing norms for such banks. There is no surprise in the guidelines even though there are minor deviations from the draft norms. For instance, the draft norms, released in August 2011, had said corporate entities earning at least 10% of their revenues from broking or real estate business would not be eligible to apply for a banking licence. The final norms do not have this provision.
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Widening access
By Livemint
When then finance minister Pranab Mukherjee announced that the central bank was considering “giving some additional banking licences to private sector players”, it wasn’t an entirely expected move.
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Decks cleared for third set of private banks
By Dinesh Unnikrishnan, Joel Rebello, Anup Roy
The Reserve Bank of India (RBI) on Friday unveiled norms for the entry of a third set of private banks into the Rs.73 trillion banking sector, three years after the government first announced the plan and nine years after it issued the last round of licences.
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New bank licences: 16 commandments
By Livemint
# Private firms, public sector entities as well as non-banking financial companies (NBFCs) are eligible to set up a bank. This needs to be done through a wholly owned non-operative financial holding company (NOFHC). Existing NBFCs, if considered eligible, will be permitted to promote a new bank or convert themselves into banks.
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RBI wants to issue new licences as soon as possible: Subbarao
By Joel Rebello
Reserve Bank of India (RBI) governor D. Subbarao spoke on various issues, ranging from inflation to the transmission of monetary policy, the current account deficit and new bank licences, at his press conference at the central bank’s headquarters in Mumbai on Tuesday after announcing the quarterly monetary policy review.
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Firms gear up to start new banks
By Dinesh Unnikrishnan, Joel Rebello, Anup Roy
Reserve Bank of India (RBI) is likely to release the final guidelines for new bank licensing norms in January to allow entry to a third set of private banks in the country’s Rs.70 trillion banking system, three years after former finance minister Pranab Mukherjee announced the plan. (Includes chart on Banking Licences: The Contenders)
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Smaller private banks in fight for survival
By Dinesh Unnikrishnan
At the centre of Thrissur town in Kerala is the Swaraj Round, the hub around which the urban centre has developed. One of the long-standing fixtures on the roundabout is the statue of Mahalakshmi, the goddess of wealth, marking the headquarters of Dhanlaxmi Bank Ltd, established 86 years ago. (Includes chart on Numbers Game)
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New bank licences: Waiting for Godot
By Tamal Bandyopadhyay
Finance minister P. Chidambaram has kept his word. He has pushed through an amendment to banking laws in Parliament to strengthen regulatory powers of the Reserve Bank of India (RBI) even if that meant dropping a clause in the Bill that would have allowed commercial banks’ entry into commodity futures trading.
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The unsavoury hurry over new bank licences
By Dipankar Choudhury
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This column had recently commented on the Reserve Bank of India’s (RBI) insistence on amendments to the Banking Regulation Act as a precondition to issue of bank licences. Little did the author expect that the whole issue will snowball into a full-blown slugfest between RBI and the government so quickly.
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RBI, finance ministry split wide open
By PTI, Anup Roy
A day after finance minister P. Chidambaram prodded the Reserve Bank of India (RBI) to speed up the process of licensing new banks, governor D. Subbarao said on Friday that the central bank would do so only after making sure that the groundwork is in place and all “enabling conditions” are met.
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Firms speed up preparations for new bank licences
By Aveek Datta
The government’s intention to hasten issuing new bank licences has enthused some banking aspirants and analysts but many are still circumspect about the final outcome.
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Govt looking to fast-track new bank licences
By Remya Nair
In an indication that the government is keen to issue new bank licences, a senior finance ministry official has disclosed that his ministry has sought legal opinion on how the Reserve Bank of India (RBI) can be empowered to do this through executive action instead of awaiting legislative sanction.
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MPs want auction of bank licences
By Dinesh Unnikrishnan
Reserve Bank of India (RBI) governor D Subbarao on Monday met the Parliamentary standing committee on finance to discuss the issuance of new banking licences to companies, a person familiar with the development said.
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Rules need to be altered before new bank licences are given: RBI
By Dinesh Unnikrishnan
The governor of the Reserve Bank of India, or RBI, on Tuesday expressed concerns over “gaps” in the existing regulations that could lead to corporations “self-dealing” in banks they promote or using them “as a private pool of readily available funds”.
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D. Subbarao | Govt should have a say in new bank licence norms
By Tamal Bandyopadhyay
On new bank licensing norms, Reserve Bank of India (RBI) governor D. Subbarao said there are some differences between the government and the central bank and they will be resolved. He defended his decision to involve the finance ministry at the draft stage as the rules have many implications, including foreign investment and financial inclusion.
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