RBI proposes to raise promoter’s capital in private banks

RBI proposes to raise promoter’s capital in private banks

An Internal Working Group (IWG) constituted by Reserve Bank of India (RBI) has recommended that the cap on promoters’ stake in the long run (15 years) may be raised from the current level of 15 per cent to 26 per cent of the paid-up voting equity share capital of the bank.

The panel also suggested that large well-run Non-Banking Finance Companies (NBFCs) with an asset size of Rs 50,000 crore and above, including those owned by a corporate house, may be considered for conversion into banks – subject to completion of 10 years of operations.

Along with many suggestions it further recommended the minimum initial capital requirement for licensing new banks should be enhanced from ₹500 crore to ₹1,000 crore for universal banks and from ₹200 crore to ₹300 crore for small finance banks.

 

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