Business Standard

Bandhan, SKS eye banking licence

Related News

With the Reserve Bank of India (RBI) expected to release final guidelines for issuing banking licences soon, two of the country’s largest micro lenders, Pvt Ltd and Ltd, are contemplating applying for banking permits.

Bandhan has started internal evaluation for a possible application for banking licence, according to Chandra Shekhar Ghosh, chairman and founder of the lender. “In 2013, we would like to apply for a banking licence. We are evaluating the idea internally.” Bandhan, with a loan outstanding of more than Rs 3,600 crore, is the largest in the country.

SKS, India’s only listed micro lender, is also looking to apply for a banking licence. “We fit the framework for new banking licence, as the draft guidelines say 25 per cent of branches should be in rural areas. For us, about 95 per cent are in rural areas. We will take a call on this after our board meeting, once the final guidelines are out,” said Dilli Raj, chief financial officer, SKS.

For SKS, which had been struggling with bad loans in Andhra Pradesh, the worst seems to be over, with a major part of the portfolio in the state already written off. Earlier in July, SKS had raised Rs 230 crore through a qualified institutional placement (QIP), which was oversubscribed on the last day of its issue.

Last month, Parliament passed the Banking Laws (Amendment) Bill. The amendments gave more powers to regulate banks, raised the voting rights of investors in banks and allowed state-owned banks to raise capital through bonus and rights issues.

RBI ahd earlier said it wanted powers to supercede banks’ boards before inviting applications for fresh bank licences. With the amendments giving RBI the powers it demanded, the central bank is expected to expedite the licence issuing process.

In his 2010-11 Budget speech, then finance minister Pranab Mukherjee had said companies and business houses would be allowed to apply for setting up new banks. In August 2011, RBI had issued draft guidelines for setting up new banks.

According to the draft norms, new banks would have to open 25 per cent of their branches in unbanked areas with a population of up to 9,999, according to the 2001 census. RBI had suggested an initial minimum capital of Rs 500 crore, while the aggregate non-resident shareholding in a new bank was to be capped at 49 per cent for the first five years.

Read more on:   
|
|
|
|
|
|
|

Read More

Exim Bank extends Line of Credit to Burkina Faso

LOC will be used for financing low-cost housing and economical buildings project

Quick Links

News Rss icon

LIC Housing Finance takes over Orbit Corp's Mumbai property

Orbit's total amount outstanding is Rs 95.50 crore including interest, expenses and other charges

VCES a rare opportunity, make fresh start, says Chidambaram

The FM asked hose in trade and industry to seize the offer

Govt allows greater flexibility for pension fund investments

But the EPFO board would need to approve the changes before they become official

Back to Top