Bank window opens for India Inc
The central bank has put in several checks and balances for instance, whether or not any entity belongs to a particular promoter group or nor or whether the entities are linked or related to the promoter group, the RBI said, would be guided by the provisions of the Banking Regulation Act, 1949. The decision of the RBI in the matter will be final, the central bank said.
To prevent round-tripping and circular movement of funds in the banking group, the RBI said the financial entities held by the NOFHC should not have any exposure credit and investments to promoters or promoter-group entities or individuals associated with the promoter group or the NOFHC. Thus, the NOFHC is aimed at ring-fencing the bank from other financial and non-financial activities of the promoter group.
The RBI requires certain specialised activities, such as insurance, mutual funds, stock broking, infrastructure debt funds, etc, to be conducted through a separate subsidiary or joint venture or associate structure, the central bank said. The holding company would be a non-operative entity and registered as an NBFC with the RBI. The bank would be governed by all the
Be the first to comment.