company will be registered as a non-banking finance company (NBFC) with the RBI and will be governed by a separate set of directions issued by RBI.
"The NOFHC and the bank shall not have any exposure to the promoter group. The bank shall not invest in the equity or debt capital instruments of any financial entities held by the NOFHC," RBI said.
With regard to corporate governance, the new guidelines said at least 50 per cent of directors of the NOFHC should be independent directors.
The corporate structure should not impede effective supervision of the bank and the NOFHC on a consolidated basis by RBI, it said.
As regards procedure for grant of bank licence, RBI said applications will be screened by the central bank itself before being forwarded to the high level advisory committee for further scrutiny.
The Committee, to be constituted shortly by the RBI, will submit its recommendations to the Reserve Bank. The decision to issue an in-principle approval for setting up of a bank will be taken by the central bank.
New bank licences expected by FY'14 end: Finance Ministry
The Finance Ministry today said it hopes that the Reserve Bank will be able to issue licences for new private sector banks by the end of 2013-14 fiscal.
RBI today issued guidelines for corporates, both in private and public sectors as well as NBFCs, to foray into the banking space. The Last date for applying for a new bank licence is July 1.
"There would be examination of applications (by RBI and a high powered committee). I think with all going well, with all clearances, by end of the financial year (2013-14) we will see some success," Financial Services Secretary Rajiv Takru told reporters here.
He said the RBI guidelines aim to "ensure that only responsible people enter the (banking) space".
When asked if public sector entities hold edge over private corporates, the Secretary said there will be a level playing field and RBI would not show favour to any entity.
"It is a level playing field. Whoever is eligible will get (licence). I don't think the RBI is going to play any favourites, and we have no