Following are the highlights of the Reserve Bank of India's guidelines for licensing of new banks in the private sector:
- Corporates, PSUs and NBFCs can set up a bank.
- No bar on entities in sectors like brokerage, realty Minimum paid-up equity capital to be Rs 500 crore.
- New banks to get listed within 3 years of business.
- Foreign shareholding limited to per cent for first 5 years.
- RBI to seek feedback on applicants' background from other regulators, Income Tax, CBI and ED.
- Licence seeker should have 10 years of successful financial track record, sound credentials and integrity.
- To comply with priority sector lending targets; open at least 25 per cent branches in unbanked rural areas.
- Boards to have majority of independent directors.
- Business plan should be realistic, viable and address financial inclusion.
- Applications will be screened by RBI and referred to a high level advisory committee
- To ensure transparency, names of applicants will be placed on RBI's website.
- Last date for applying for the licence is July 1.
- Over the last two decades, RBI licensed 12 banks in private sector.
- New banks were proposed in Budget speech for 2010-11
- RBI floated first discussion paper on August 2010.
