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RBI COMMITEE FOR NBFC AND CORPORATE

 Internal working group of RBI headed by P.K Mohanty has recommended series of reform in banking. Committee has been constituted by RBI  to examine and review the licensing and regulatory guideline relating to ownership and control, corporate structure and other related issues. some of them are following;-

  1. The cap on promoter stake to be increased in long run(15 year) from currently 15% to 26% of the paid up voting capital of Bank.
  2. On non promoter shareholding to have a uniform cap of 15% of the paid up voting capital of bank of all type of shareholder.
  3. For the payment bank intended to convert to small finance bank track record of 3 years is suffice to consider.
  4. Small Finance Bank and Payment Bank may be listed within 6 years from the date of reaching net worth of equivalent to prevalent entry capital prescribed for Universal Bank or 10 years from the date of commencement of operation, whichever is earlier.
  5. The  minimum initial paid up capital requirement for licensing new Universal Bank should be increased from currently 500 crore to1000crore and from 200 crore to 300 crore for small finance bank.
  6. Non operative financial holding company should continue to be preferred option for granting new license for universal bank however it should be mandatory in case where individual promoters, promoting entities and converting entities.
  7. Large NBFC with an asset size of rupees 50,000 crore and above, including those of corporate house, may be considered for the conversion into Bank subject to completion of 10 years and meeting due diligence criteria with additional condition specified in this regard.

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