WITH the intention of introducing comprehensive reforms in the banking sector, the RBI’s Internal Working Group (IWG) has decided to permit big corporate and industrial outfits to own banks. According to the report of the IWG, business firms can openly apply for license or those dealing in lending activities can transmute their prevailing businesses to a bank.
Two crucial stipulations have been introduced by the working group to support this move. One is an amendment in the Banking Regulation Act 1949 which deals with connected lending and exposures between the banks and other financial and non-financial group units. According to Section 20 of the Act, banks cannot provide any loans or advances to directors. Secondly, to reinforce the RBI’s guiding method for large companies, the group has recommended that the regulator may scrutinise the relevant judicial provisions to prepare itself for the mammoth task.
If these suggestions get the green signal, it will mark the re-entry of India Inc into banking after four decades; the last round of bank nationalisation took place in 1980.
For the first time, the watchdog has moved beyond the normal terms on promoters’ eligibility and net worth and set a minimum threshold on assets requirement and operational record. The group has proposed to allow large non-banking financial companies (NBFCs) having at least 10 years’ record with an asset size of more than Rs 50,000 crore, including those within the fold of business firms, to convert to banks.
In addition, non-operative financial holding company structure has to be adopted by the NBFCs with varied business activities. Accordingly, entities such as Bajaj Finserv, Aditya Birla Capital and Tata Capital, which also have insurance and asset management activities, have to rearrange their corporate edifice.
Esta historia es de la edición December 14, 2020 de India Legal.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición December 14, 2020 de India Legal.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
PIL, Difficult To Swallow?
In a recent ruling, the Bombay High Court lamented the increasing number of frivolous public interest litigations being filed in courts and echoed the sentiments of the Supreme Court that such litigations are the bane of the judicial system. Is there any way to restrict their misuse?
Till Infertility Do Us Part...
The Calcutta High Court slammed a husband for initiating divorce proceedings due to his wife's infertility and asked him to be a pillar of support for her. Courts have often taken an empathetic view in such matters
IS THAT LEGAL?
Ignorance of law is no excuse. Here are answers to frequently asked queries regarding matters that affect us on a day-to-day basis
The Big Lie
In America, The Big Lie is an idiom used by Donald Trump's opponents and the media to describe his constant gripe about election fraud. Now, it seems more suited to another Republican, Congressman George Santos (right), who has been facing growing calls to resign after he admitted fabricating parts of his resume and biography since his election in New York last year.
Flying into the Sunset
Over 50 years since the first and original jumbo jet, the Boeing 747, took to the skies and revolutionized air travel, the last of the legendary aircraft (right) was delivered to a freight charter company, bringing down the curtain on one of aviation's most successful products.
Star Crossed
Actor and producer Alec Baldwin is a Hollywood legend, having starred in a range of movies, award winning TV sitcoms, and theatre. He was most recently seen in Mission Impossible Fallout, which is an apt description of his current situation.
Walkouts in the UK
An estimated half a million workers have gone on strike, shutting down thousands of schools, public transport and border disruption. It is the biggest day of industrial action for more than a decade.
Myanmar's Misery
Two years after the military coup ousted the elected government led by Aung San Suu Kyi, the brutal crackdown by the junta on so-called \"insurgents\" and civilian protesters has reached a new level with the use of air strikes, a new and deadly tactic in the ongoing civil war.
AMERICA'S ANGST
From messy, divisive politics to a series of mass shootings, and now black officers brutally beating another black man to death as seen in bodycam videos, America's domestic convulsions are cause for serious introspection
JUSTICE LEAGUE
There are few judicial appointment procedures in the world that are completely bereft of the overarching presence of either the executive or the legislature, or both. In the end, the judge is left with all the powers vested in him/her by the constitution to uphold the rule of law, within an atmosphere of external influences
