New Bank License Eligibility rules by RBI.

As the Reserve Bank of India has opened the new players to enter the banking sector, has given a hope for many private major players to enter the booming sector where the scope is very high for growth and huge potential as most of rural market is still untapped.

The draft guidelines are being issued with regular modification with cautions and conditions for the purpose of laying a strong rules and regulations.

Few Eligibility criteria as per the new guidelines are.,

Minimum paid up capital of Rs.500 crores,
Should get listed within 2 years of time,
Should setup at least 25% of their branches in rural unbanked areas (especially tier-III)
Be owned by a separate holding company that cannot borrow money to float the bank.
Foreign holding in the bank has to be less than 49%,
Operating company has to get its share in the company to 20% within 10years from start.

Finance companies has a chance to convert themselves into bank and even promoter groups with good credential(10 years record will be considered) in running their business can setup banks.

The Major companies who are in the race for new bank licenses are.,

Tatas, Anil Dhirubhai Ambani Group(ADAG), Power Finance Corporation(PFC), Aditya Birla Group, Bajaj Group, Larsen & Toubro (L&T), LIC Housing, Industrial Finance Corporation of India(IFCI), Religare, Srei, Mahindra and Mahindra(M&M).

BANKING SECTOR CURRENT AFFAIRS: APRIL - MAY 2011

BANKING SECTOR CURRENT AFFAIRS: JUNE - JULY 2011
BANKING SECTOR CURRENT AFFAIRS: AUGUST - SEPTEMBER 2011