Page 10 - Banking Finance September 2021

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Reserve Bank News
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RBI gives nod to set up The application was filed in Misra's banking sectors exposure to them is
main PIL seeking directions to the RBI below Rs 5 crore.
small finance bank to ease the moratorium on withdraw-

The Reserve Bank of India (RBI) told als from the PMC Bank during the IDFC says RBI nods for ex-
the Delhi High Court that it has given coronavirus pandemic.
in-principle approval for setting up a iting IDFC First bank
small finance bank which will take RBI extends deadline for IDFC Ltd said the Reserve Bank of In-
over the scam-hit PMC Bank soon. current A/c dia (RBI) has clarified that the com-
A bench of Justices D N Patel and Jus- The RBI has given banks time until pany can exit IDFC First Bank as a pro-
tice Jyoti Singh granted time to the October 31 to comply with its circular moter after the completion of five
RBI to file an affidavit on the develop- on introducing discipline in the open- years. However, this is a clarification
ment in the matter. ing of current accounts. given by the central bank and not a
formal nod. IDFC will have to seek
Senior advocate JayantBhushan, rep- The RBI has said that banks should es-
formal approval from the central bank
resenting the RBI, submitted that it calate to the Indian Banks' Associa-
for the exit.
has given in-principle approval to Cen- tion (IBA) any issues they face in
trum Finance Services Ltd to set up a implementing the directive, and if it IDFC is the owner of the holding com-
small finance bank which will take still remains unresolved they should be pany IDFC Financial Holding Company,
over Punjab and Maharashtra Coop- forwarded to the RBI for regulatory which in turn holds 36.56 per cent
erative (PMC) Bank very soon as the consideration. stake in the bank. IDFC's exit from the
process in near completion. According to a PSU bank chief, the bank will indicate that the holding

He said this will ease the trouble RBI in its meeting with public sector company could reverse merge with
the bank, in line with what two small
faced by the bank's customers who lenders made it clear that the circular finance banks recently announced. If
are unable to withdraw their money. needs to be implemented in spirit but
if there are operational issues faced by the holding company merges with the
The court was hearing an application bank, then IDFC may have to sell its
customers, they should be resolved at
by consumer rights activist Bejon mutual funds business as well, analysts
the industry level.
Kumar Misra seeking directions to the say.
RBI to consider other needs of PMC In a fresh circular on the guidelines for The bank management was not im-
Bank depositors such as education, current accounts, the RBI reiterated mediately available for comment on
weddings and dire financial position, that it does not apply to borrowers
not just serious medical emergencies who have not availed of cash credit the development.
as being done at present. (CC) or overdraft (OD) facility and the IDFC announced receiving the RBI's

10 | 2021 | SEPTEMBER | BANKING FINANCE