RBI on February 22, 2013, had released the Guidelines for Licensing of New Banks in the Private Sector on its website.
RBI issued a press release on March 7, 2013 inviting queries from intending applicants seeking clarifications on the guidelines.
In the wider interest for all intending applicants, Reserve Bank had stated that it would post the clarifications on its website.
34 individuals/ organizations, sought clarifications from RBI vide 443 queries.
The majority of the queries ie. 240 queries from 10 individuals/ organisations were received on April 10, 2013, i.e. on the last date.
After the due date, further, 42 queries were received. The clarifications to all the queries have been provided. RBI has clubbed few queries with other related queries for the sake of clarity and continuity.
A large number of queries have brought out issues relating to the provisions in the guidelines on the eligible promoters, ‘fit and proper’ criteria, corporate structure of the Non-Operative Financial Holding Company (NOFHC), foreign shareholding and on transition time to the new structure.
RBI has clarified, that while interpreting the replies, it must be kept in view that though the replies are specific to the questions, these must be seen in the wider context of the guidelines.
Validity period of the in-principle approval
As per the guidelines for licensing of new banks in the private sector issued vide RBI Press Release dated February 22, 2013, the validity of the in-principle approval for setting up of the NOFHC / bank was one year from the date of issue and would lapse automatically, thereafter.
The queries received from intending applicants brought out several complex issues pertaining to re-organization of the existing corporate structure, restructuring of businesses and meeting the regulatory requirements. Hence for smooth transition from the existing structures to that prescribed in the guidelines as also for meeting the regulatory requirements, the validity period of the in-principle approval has been increased from one year to 18 months.
- RBI issues clarification on new banks licence (thehindu.com)
- RBI issues clarification on new banks licence (news.in.msn.com)
- Acknowledgement by Banks at the Time of Submission of Form 15G/15H. Have you got one? (simplybanking.wordpress.com)