Business

RBI panel to review private bank norms

The Reserve Bank of India (RBI) has set up a five- member internal working group to review private lenders’ ownership norms and corporate structures.

The group’s terms of reference include reviewing eligibility criteria for applying for a banking licence and regulations relating to holding company structure. It will also suggest the manner of migrating all banks to a uniform regulation in the matter, including providing a transition path.

The review will help harmonise norms applicable to banks set up at different time periods, irrespective of the date of commencement of business, RBI said.

“Though the overarching principle that the ownership and control of private sector banks should be well diversified and that the major shareholders are ‘fit and proper’, have remained unchanged, the specific contours have evolved over the years with specific prescriptions being given as part of licensing guidelines issued at various points in the past,” the banking regulator said while reasoning for the review.

The members of the panel are Prasanna Kumar Mohanty, and Sachin Chaturvedi — both RBI board members, Lily Vadera, and S. C. Murmu, both executive directors of the RBI and Shrimohan Yadav, Chief General Manager, RBI who will be the convenor.

The panel will also review the licensing guidelines and regulations relating to ownership and control in Indian private sector banks and suggest appropriate norms, while keeping in mind the issue of excessive concentration of ownership and control, RBI said.

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Printable version | May 18, 2021 6:02:25 AM | https://www.thehindu.com/business/rbi-panel-to-review-private-bank-norms/article31816082.ece

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