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The Mint Report for 29 August

The Mint Report for 29 August
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First Published: Mon, Aug 29 2011. 10 57 PM IST
Updated: Mon, Aug 29 2011. 10 57 PM IST
First off, India is a step closer to seeing a fresh crop of banks sprout on its soil. On Monday the Reserve Bank has announced its draft guidelines for issuing new bank licenses. Significantly, both companies and NBFCs will be eligible to apply to set up banks. Of course, they’ll have to have a sound reputation, a minimum decade-long track record, and diversified ownership. RBI has also set a higher capital adequacy ratio of 12% for the new entrants instead of the existing 9%. What’s more, applicants will need to keep their exposure to real estate or broking to less than 10%. Finally, foreign holdings will be restricted to a maximum of 49% of the applicant.
In other news, a lockdown by workers has halted work at Maruti Suzuki’s plant in Manesar near Delhi. The latest face off came after workers refused to sign a so-called Good Conduct Bond presented to them by the management. Maruti says the bond is vital to maintaining order. It adds that it workers who don’t sign it will not be allowed into the plant and will face pay cuts. Bit workers are calling the bond unfair. The Manesar pant is where Maruti makes its newly unveiled Swift cars. Back in June, workers had gone on a 13-day tool down strike demanding recognition of their union.
And finally, Indian markets rocketed upwards on Monday, taking their lead from a surge in Asian. The gains came after signs that the US Fed was considering a fresh monetary stimulus. It leapt 567 points to 16,416. And the Nifty jumped 172 to 4,920.
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First Published: Mon, Aug 29 2011. 10 57 PM IST