RBI says all banking licence applicants will have to comply with their norms
August 6, 2013
According to Sinha, unless RBI scrutinises all applications, they cannot take a definite view on the dispensation
There is also a committee on this, which is likely to be set up. “We are
in the process, but the committee’s work will start after the internal
scrutiny is over. We have some time,” said Sinha.
On the Know Your Customer (KYC) norms, he said there are still complaints that people find it difficult to open accounts. “What we gather is that RBI’s instructions are not really well percolated down into the branches and that is where banks have a responsibility to ensure that,” he said.
He suggested the identity requirements could be simplified for certain no-frills accounts. “Banks could also be encouraged to revise products suiting to these segments in terms of lower charges, lower or no minimum balance requirement etc.”
ALSO READ: RBI announces final guidelines on new banking licences
From a policy perspective, foreign banks are into setting up wholly-owned subsidiaries. “When that happens as per the discussion paper that we have issued, foreign banks would be almost at par with the domestic banks in terms of almost everything including branch expansion,” said Sinha.
When the wholly-owned subsidiary scheme kicks off, the whole of India will be available to foreign banks at par with the domestic banks. “Those who want to really exploit, there will be huge opportunities. This is a scheme in the discussion paper and I hope when the final scheme comes, it will be more or less on the same
On the Know Your Customer (KYC) norms, he said there are still complaints that people find it difficult to open accounts. “What we gather is that RBI’s instructions are not really well percolated down into the branches and that is where banks have a responsibility to ensure that,” he said.
He suggested the identity requirements could be simplified for certain no-frills accounts. “Banks could also be encouraged to revise products suiting to these segments in terms of lower charges, lower or no minimum balance requirement etc.”
ALSO READ: RBI announces final guidelines on new banking licences
From a policy perspective, foreign banks are into setting up wholly-owned subsidiaries. “When that happens as per the discussion paper that we have issued, foreign banks would be almost at par with the domestic banks in terms of almost everything including branch expansion,” said Sinha.
When the wholly-owned subsidiary scheme kicks off, the whole of India will be available to foreign banks at par with the domestic banks. “Those who want to really exploit, there will be huge opportunities. This is a scheme in the discussion paper and I hope when the final scheme comes, it will be more or less on the same
Anand Sinha, deputy governor of the Reserve Bank of India (RBI), said all banking licence applicants will have to comply with the requisite norms.
In the recent past, some applicants had asked RBI for exemption from meeting certain criteria. According to Sinha, unless RBI scrutinises all applications, they cannot take a definite view on the dispensation. “But broadly, the guidelines are there and people will have to comply with that,” said Sinha.
In all, RBI has received 26 applications. “We have started the work. It is quite an extensive work because now we are looking at corporate groups. The work load is quite heavy on that sense. The process is on,” said Sinha.
In the recent past, some applicants had asked RBI for exemption from meeting certain criteria. According to Sinha, unless RBI scrutinises all applications, they cannot take a definite view on the dispensation. “But broadly, the guidelines are there and people will have to comply with that,” said Sinha.
In all, RBI has received 26 applications. “We have started the work. It is quite an extensive work because now we are looking at corporate groups. The work load is quite heavy on that sense. The process is on,” said Sinha.
There is also a committee on this, which is likely to be set up. “We are in the process, but the committee’s work will start after the internal scrutiny is over. We have some time,” said Sinha.
On the Know Your Customer (KYC) norms, he said there are still complaints that people find it difficult to open accounts. “What we gather is that RBI’s instructions are not really well percolated down into the branches and that is where banks have a responsibility to ensure that,” he said.
He suggested the identity requirements could be simplified for certain no-frills accounts. “Banks could also be encouraged to revise products suiting to these segments in terms of lower charges, lower or no minimum balance requirement etc.”
ALSO READ: RBI announces final guidelines on new banking licences
From a policy perspective, foreign banks are into setting up wholly-owned subsidiaries. “When that happens as per the discussion paper that we have issued, foreign banks would be almost at par with the domestic banks in terms of almost everything including branch expansion,” said Sinha.
When the wholly-owned subsidiary scheme kicks off, the whole of India will be available to foreign banks at par with the domestic banks. “Those who want to really exploit, there will be huge opportunities. This is a scheme in the discussion paper and I hope when the final scheme comes, it will be more or less on the same lines,” said Sinha.
The scarcity value of the licences has attracted a motley crew of hopefuls, ranging from India's humble postal department to billionaires.
ReplyDeleteThe list of India's aspiring banking moguls is less impressive than it is long. The RBI said on July 1 that it had received 26 applications for new banking licenses.
Nobody knows how many permits it will eventually issue - the last time India allowed new lenders in 2003, only two out of more than 100 applicants made the final cut; in 1993, 10 new banks were born.
although some comment that It is a good thing if no one gets a permit. The country is already having SBI and its subsidiaries, First 19 banks nationalised in 1969 and another 6 banks nationalised six years later. Out of 25 nationalised banks, only 24 remain now, several private sector banks, several new generation banks and thousands of cooperative banks. Most of these are not properly controlled by RBI for obvious reasons. NPAs are mounting every day. Thousands of crores of rupees written off by these banks every year due to high profile defaulters (most of them connected to politicians and top industrialists). When such is the situation, where is the need for new banks? It is better if the finance ministry and RBI concentrates on reconstructing the existing banks, not by merger, but by removing all the dead woods like government sponsored chairmen and executive directors as well as nominated directors appointed for political reasons. Investigate thoroughly and recover monies from huge defaulters. Save India from further financial disaster.