Page 8 - BANKING FINANCE JUNE 2016

RBI CORNER
RESERVE BANK
Jalandhar-based Capital
Small Finance Bank be-
gins operations
Reserve Bank of India has notified
that Jalandhar-
based Capital Small
Finance Bank com-
menced its opera-
tions as a small fi-
nance bank with effect from April 24.
The RBI issued a licence to the bank
under Section 22(1) of the Banking
Regulation Act, 1949, to carry on the
business of small finance bank (SFB) in
India. It is the first SFB to start bank- curities (Ahmedabad), and Amitosa Leasing & Finance (Ulhasnagar, Thane).
ing operations. The Capital Small Fi-
nance Bank has been set up by con-
verting the erstwhile Capital Local
Area Bank.
Capital Local Area Bank was one of
the 10 applicants to be given in-prin-
ciple approval for setting up SFBs in
September 2015.
According to RBI's prudential norms
for SFBs, Capital Small Finance Bank
will be required to extend 75 per
cent of its adjusted net bank credit
to the sectors eligible for classifica-
tion as priority sector lending. Fur-
ther, at least 50 per cent of its loan
portfolio should constitute loans and
advances of up to Rs. 25 lakh.
8 | 2016 | JUNE
Copyright@ The Insurance Times. 09883398055 / 09883380339
There is a need to strengthen the grievance mecha-
nism: Patel
RBI Deputy Governor Urjit Patel said that with addition
of a number of account-holders through Jan Dhan Yojana,
there is need to strengthen the consumer grievance
mechanism. "Consumer protection will become more im-
portant as more people down the income level get bank
accounts. As far as I know people who are relatively less
well-off suffer... they need more protection. New and inexperienced customers
need more protection," he said at the 10th Civil Services Day.
RBI cancels licence of three NBFCs
The RBI has cancelled the certificate of registration of three non-banking finan-
cial companies (NBFCs). Further, 10 NBFCs have surrendered the certificate of
registration granted to them.The central bank, in a statement, said it has can-
celled the certificate of registration of Shubh Leasing (Chandigarh), Global Se-
The 10 NBFCs that surrendered their certificates include six from Mumbai - Rupa
Equities, Shekhar Holdings, Rahul Securities, Kamalnayan Investment & Trad-
ing, Madhur Securities, and Niraj Holdings.
RBI released draft guidelines for on-tap bank licences
The Reserve Bank of India (RBI) has released draft guidelines for issuing on-tap
universal bank licences but excluded large industrial
houses from entering the sector. The proposed licensing
policy is a change from the current stop-start policy
where RBI opens the window for bank licences periodi-
cally but rarely.
Since 2013, RBI has licensed two universal banks, 11 payment banks and 10 small
finance banks. It has also floated the idea of allowing more differentiated banks,
such as wholesale banks. By putting universal bank licences on-tap, it is taking the
attempt to encourage a more diverse and competitive sector a step further.
| BANKING FINANCE