As much as the banking licenses are being eagerly awaited, their announcement may not bring enough cheer to India Inc. For as per Business Standard, the RBI is paying a lot of attention to warnings about issuing bank licenses to corporate houses. Economists and global financial regulators have cautioned that the risks of offering banking licenses to corporate outweigh the benefits. Regulators in the US and South Korea do not allow industrial houses to set up banks. Australia, Canada, UK and Hong Kong allow it with restrictions on ownership and voting rights.
Thus taking cues from these, industrial houses like Aditya Birla Nuvo, Bajaj group, Videocon and Reliance Capital may find it rather difficult to pass the RBI's test. Ones like the Tata group and Mahindra Finance have already withdrawn their applications. Moreover, when bank licenses were issued in 1993 and 2004, business houses were not considered. Even India Post may be given a miss due to its government ownership. Thus it appears that only specialized NBFCs and MFIs are in the fray for banking licenses.
Thus taking cues from these, industrial houses like Aditya Birla Nuvo, Bajaj group, Videocon and Reliance Capital may find it rather difficult to pass the RBI's test. Ones like the Tata group and Mahindra Finance have already withdrawn their applications. Moreover, when bank licenses were issued in 1993 and 2004, business houses were not considered. Even India Post may be given a miss due to its government ownership. Thus it appears that only specialized NBFCs and MFIs are in the fray for banking licenses.
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