Cos laud new bank licence norms

Prospective bank entrants believe the Reserve Bank of India (RBI) guidelines on new banking licences are positive and will ensure that only serious long-term players are in the hunt for a bank licence.

Bharat Doshi, the chairman of Mahindra & Mahindra Financial Services, said that the minimum paid equity capital requirement of R500 crore along with the need for a sound 10-year financial track record ensures that non-serious players are weeded out.

Sunil Godhwani, the chairman and managing director of Religare Enterprises, said at first glance, it seems positive, adding that the clause to allow new banks to list in three years instead of earlier requirement of two years is a welcome sign. "Financial service companies are largely independent, especially banks should not be governed by any promoter group. So the decision to cut promoter holding to 15% is a positive sign as well," he added.

Ajay Srinivasan,CEO, financial services Aditya Birla Group, said, "We welcome the new banking guidelines. This is a key milestone that promises to not only provide an impetus to the Indian financial services industy, but also usher a new era of financial inclusion in the country. The Aditya BirlaGroup remains committed to meeting all the financial needs of its targetcustomer. And towards this strategy, banking will play a key role. We intendto apply for a banking licence."

Industry experts also welcomed the move to permit players across the board including private and public sector entities as well as Non-Banking Financial Companies (NBFCs). "Its a good thing that now brokers and realty players have been allowed. Why exclude anyone? The regulator anyway does so much ring fencing around banks, it does not matter who the promoter is. It takes a lot of time before a player becomes big enough to become competition, so its not a major concern," said Keki Mistry, VC & CEO, HDFC.

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