Page 8 - BANKING FINANCE November 2015 ONLINE
P. 8
RBI CORNER
RESERVE BANK
NEWS
RBI approves 10 small finance banks RBI demands action
Reserve Bank of India has shortlisted area bank and one non-banking finance against firms not operat-
10 micro lenders to set up small banks company.
to advance loans primarily to ing from registered ad-
the unbanked, small busi- Small finance banks are simi-
nesses and farmers, micro lar to regular commercial dress
and small industries and un- banks except that their
organized sector entities scale of service will be much The Reserve Bank of India has asked
who do not have access to smaller. the Ministry of Corporate Affairs to
finance from large banks. take action against companies that
These new type of banks are expected do not operate from their registered
Of the 10 entities granted in-principle to generate at least 75% of their busi- address and collect money and de-
approval to transform into banks, eight ness from the priority sector (largely posits from consumers without au-
are micro-finance providers, one local agriculture). thorization.
RBI nods for 11 payments banks This need has been alarmed by the
RBI after coming across instances
India's top corporate including Mukesh the RBI, the "in-principle" approval where complaint letters of unautho-
Ambani's Reliance Industries and Sunil granted will be valid for a period of 18 rized financial activity sent to the
Mittal-led telecom firm Airtel, Tech months during which time the applicants company's registered address were
Mahindra part of the Mahindra group, have to comply with the requirements returned undelivered. Thousand of
Sun Pharma promoted by Dilip under the guidelines and fulfill the other gullible investors have been losing
Shanghvi and Aditya their life savings in investment
Nuvo of the Kumar conditions as may be schemes floated by fly-by-night op-
Mangalam Birla Group stipulated by the Bank. erators from time to time and this
are among eleven com- has becomes a cause of concern for
panies which have re- Only after the applicants the government, the banking regu-
ceived an "in-principle" have complied with the lators and the market regulator.
approval from the Reserve Bank to set requisite conditions laid
up payments banks in the country. down by it as part of "in-principle" ap- Going forward,the RBI has under-
proval, the Reserve Bank would con- scored the need for having a system
These banks are expected to help in- sider granting to them a licence for at the Registrar of Companies (RoCs)
crease access to basic banking services commencement of banking business to validate the address submitted by
to millions of people in the country in- under the Banking Regulation Act, a company as the online addresses
cluding migrants who are out of the 1949. Until a regular licence is issued, were incorrect.
formal banking system. According to the applicants cannot undertake any
banking business," as reported by RBI.
8 | 2015 | NOVEMBER | BANKING FINANCE
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