Banking regulator Reserve Bank will soon finalise guidelines for banks creating holding companies for their subsidiary businesses like insurance and asset management, a top RBI official indicated in Mumbai on Thursday.
“The responses have started coming…The moment the deadline is over, we would consolidate all responses and wherever necessary we would try to modify it,” RBI Deputy Governor V Leeladhar told reporters on the sidelines of FICCI Global Banking Conference.
He, however, did not disclose the timeline for the release of final guidelines in this regard.
“This is for the first time we are going to have a holding company in Indian financial sector. Starting this, we want it in a proper way taking into account all plus and negative points. It is not something which we are going to superimpose on banks,” he clarified.
Top banks like ICICI and State Bank of India had recently expressed their intent to create holding companies for their subsidiary businesses of insurance and asset management.
The umbrella holding company could then raise capital for these businesses, which need funds to fuel their growth.
Close on heels of ICICI Bank proposing the model, Reserve Bank floated a discussion paper on the subject and sought feedback, the deadline for which is approaching.
The discussion paper expressed RBI reservations on the holding company structure proposed by banks citing the complexity of regulation.
“We do not have a final view on whatever ideas we have put on the discussion paper…We need time to go through the responses,” he said.