1. Eligible promoters: Entities/groups in the private sector, owned and controlled by residents, with diversified ownership, sound credentials and integrity and having successful track record of at least ten years will be eligible to promote banks.
In a significant move, the RBI has barred groups having even an exposure of 10 per cent (by way of assets or income or both) in real estate and/or broking activities over the past three years. Evidently, these sectors are 'speculative' in nature and the business model adopted in such businesses will be 'misaligned' with that required by a bank.
2. Corporate structure: New banks will be set only through a wholly-owned non-operative holding company (NOHC), which will be registered with the RBI as a non-banking finance company. All financial activities of the promoter group will come under the NOHC. The idea is to ring fence the financial interests of the group from its other business activities and give a measure of protection to the bank's depositors.
3. The minimum capital requirement will be Rs.500 crore. The NOHC will hold a minimum 40 per cent of the capital for five years from the date of licensing. The aggregate non-resident shareholding will not exceed 49 per cent for the first five years.
4. Corporate governance: At least 50 per cent of the directors of the NOHC should be independent directors.
5. The business model should be realistic and viable and should address how the bank proposes to achieve financial inclusion. The bank should have a fourth of its branches in unbanked rural areas. The RBI will have the powers to vet the business plan and pull up the promoters for any deviations.
6. Amendments to the Banking Regulation Act, 1949, will be carried out to give the central bank extensive powers in a wide range of matters necessary for effective supervision. The bank shall get its shares listed on the stock exchanges within two years of licensing.
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