RBI ISSUES GUIDELINES FOR PAYMENT BANK AND SMALL BANK (1) The Reserve Bank of India has issued guidelines to set up Payment Banks and Small Banks whose licenses will be restricted to specified areas. (2) A Payment Bank will be able to take deposits, but cannot lend. It has to invest all the funds in government securities. (3) A Small Bank on the other hand will be allowed to lend, but with restrictions on where they can operate.Further the lending should be directed at farmers and small enterprises. . (4) The NBFCs could be eligible to set up both sorts of banks. (5) The primary objective of setting up of Payments Banks will be to further financial inclusion by providing small savings accounts, and payments, remittance services to migrant labour workforce, low-income households, and small businesses, (6) Foreign investors can own up to 74% of a banks equity capital and these restrictions are likely to apply to these banks. (7) Among conditions, the promoters would have to invest at least 40% of the capital which will be locked in for five years. (8) The shareholding has to be brought down to 40% within three years, 30% in 10 years, and to 26% within 12 years.
Posted on: Sat, 19 Jul 2014 17:33:17 +0000
Trending Topics
Recently Viewed Topics
© 2015