Banking Bill passed, Reliance, Religare, others get set for foray
Corporate entities interested in setting up new banks, including Reliance and Religare, have begun doing the groundwork after a key Bill was passed in the Lok Sabha last evening.
In a major step to reform India's banking sector, the Lok Sabha had passed the Banking Laws (Amendment) Bill, 2011, paving the way for foreign investments in the sector and establishment of new private banks.
The Bill will allows RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10 per cent from 1 per cent.
RBI wanted the government to amend the banking laws before starting the process towards issuance of new banking licences.
The major groups interested in seeking new banking licenses, whenever RBI decides to give them, include Anil Ambani-led Reliance Group, financial services conglomerate Religare group, Larsen & Toubro and Shriram group.
Welcoming the passage of the bill in Lok Sabha, Religare Enterprises chief Shachindra Nath said that "it is important that new banks are brought in to contribute towards the overall financial inclusion and development agenda".
"We are now waiting for the Bill to be passed in the Upper House and the RBI to come out with its final guidelines post which we would evaluate how we align our banking business model with the regulatory intent," Nath said.
"Given the under penetration of banking and financial services in a country as large as India, it is important that new banks are brought in to contribute towards the overall financial inclusion and development
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