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RBI clears decks for on-tap banking

The foreign shareholding in the bank would be as per the existing Foreign Direct Investment

Policy Pulse
Publish Date: Aug 2 2016 3:35PM | Updated Date: Aug 2 2016 3:36PM

RBI clears decks for on-tap banking

Paving the way for entry of new players in banking sector, the Reserve Bank today heralded 'on tap' universal banking license regime.

 
The licensing window will be open on-tap, and the applications could be submitted to the RBI at any point of time. The 'on tap' guidelines are released by Licensing of Universal Banks in the Private Sector.
 
As per the guidelines, the initial minimum paid-up voting equity capital for a bank should be Rs 500 crore and thereafter, the bank should have a minimum net worth of Rs 500 crore at all times.
 
The guidelines said that large industrial houses are excluded as eligible entities but are permitted to invest in the banks up to 10 per cent. RBI also excluded large industrial houses from the purview though they can invest up to 10 per cent in new banks.
 
The foreign shareholding in the bank would be as per the existing FDI. At present, the aggregate foreign investment limit is 74 per cent. At present, there are 27 public sector banks and 24 private sector banks in the country.
 
The bank should get its shares listed on the stock exchanges within six years of the commencement of business by the bank.