Mumbai: The Reserve Bank of India (RBI) has barred large industrial houses from setting up banks in the country, while allowing investment in any bank up to 10 percent.
Big corporates were excluded from the eligible entities in the guidelines issued on Monday by the RBI for ‘on-tap’ licensing of universal banks in the private sector.
According to RBI, resident individuals and professionals having 10 years of experience in banking and finance at a senior level are eligible to promote universal banks.
The eligible promoters include individual residents, entities in the private sector that are owned and controlled by residents and existing non-banking financial companies (NBFCs) that are controlled by residents.
Only entities with total assets of at least Rs 5,000 crore (Rs 50 billion) and 10 years of successful track record will be allowed to become major stakeholders in banks.
The non-financial businesses of any entity becoming a major stakeholder in banks will not be able to exceed 40 percent of its total assets.
The initial minimum paid-up voting equity capital for a bank shall be Rs 500 crore.