Reserve Bank of India’s panel on private banks has backed the continuation of Non-Operative Financial Holding Company (NOFHC) as the preferred structure for setting up new universal banks.
However, NOFHC may be mandatory only where the individual promoters and promoting entities/ converting entities have other group entities.
Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services (APAS), said that NOFHC structure is important to ring-fence interest of depositors and enhance corporate governance in banking entities.
Banks, currently under NOFHC structure, may be allowed to exit from such a structure if they do not have other group entities in their fold, the