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Mumbai19 hours ago
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- Uday Kotak has recently reduced its stake in Kotak Mahindra Bank to 26% at the behest of RBI.
- Hinduja brothers hold 14.68% stake in IndusInd Bank as promoters, which can be increased to 26%
Reserve Bank of India (If the RBI accepts the recommendation of its internal working group, then there may be an opportunity to increase stake for Hinduja brothers in IndusInd. Currently, Hinduja brothers hold 14.68% stake in the bank as promoters. This can be increased to 26%.
Uday on the other hand could be of benefit to Kotak. Currently, he holds 26% in Kotak Mahindra Bank. Recently RBI had asked to reduce it. In this way, they will not have to reduce any further stake.
The path has become easier for NBFC
On the other hand, the acceptance of this recommendation will make the way for 9 non-banking financial companies (NBFCs) to become banks. In such a situation, Mahindra & Mahindra and Bajaj Finance will be the leading contenders. While Payments Banks like Paytm can also become small finance banks. This will be because it is the NBFC of all corporate houses and follows the rules. This working group was established on 12 June 2020.
Bajaj Of AUM 1.15 lakh Crore Money
The Asset Under Management (AUM) of Bajaj Finance stood at Rs 1.64 lakh crore in March 2020. Its total income has been Rs 18,502 crore. The net profit has been Rs 3,995 crore. It has 1803 branches of which more than 900 branches are in rural India. Mahindra & Mahindra Financial Services’s AUM stood at Rs 81,436 crore in the first quarter of the current financial year. Its net profit for the quarter was Rs 156 crore. It has about 1300 branches. Apart from this, there are 7 more NBFCs whose assets are more than 50 thousand crores.
Prominent among them are Aditya Birla Capital, L&T Finance, Chola Finance, Piramal Enterprises, Muthoot Finance and SRT Finance. Assets worth 50 thousand crores have been kept as a condition in the RBI recommended rules.
Banking The rules To easy Make Of try
Explain that in the recommendation of RBI Working Group, it has been said that banking rules should be simplified. Accordingly, a well-run NBFC may get this opportunity. NBFCs that have been doing business for 10 years may be eligible. For such NBFC, at least their size should be 50 thousand crores. They can be in the form of a full-flanged bank themselves.
Country In 9,601 NBFC
There are 9601 NBFCs in the country. The annual growth rate of NBFCs has been 18.6% between March 31, 2009 to March 31, 2019. While the commercial bank grew by 10.7% during this period. The total balance sheet size of NBFC is 18.6% of the total balance sheet size of commercial bank. In March 2009 it was just 9.3%. RBI’s IWG said, as on 31 March 2020, the asset size of NBFC has been more than Rs 51 lakh crore.
Corporate The structure Of Review
The objective behind the creation of this working group was to review the guidelines and corporate structure of the Indian private sector bank. According to the recommendation of this working group, large industrial houses can be approved as promoters of the bank. For this, the Banking Regulation Act 1949 will need to be changed. Also, the supervisory mechanism will need to be strengthened.
Share In concession To give Of Recommendation
The RBI committee recommended promoters of private banks to give up to 26% stake in equity shares of the bank. The RBI panel also suggested that the cap for promoters on paid-up voting equity share capital of the bank for a period of more than 15 years be increased from 15% to 26%. .
Payments Bank Too Small Finance Bank Ho Can Huh
Apart from these, the IWG has recommended that given three years of track record and experience, Payment Banks can be converted into Small Finance Banks (SFBs). At the same time, SFBs and Payment Banks can be listed on the stock market within 6 years of reaching universal bank net worth or if they are operational for 10 years.
The early Finance One Thousand Crore
The RBI’s IWG suggested that the initial capital for licensing a new bank should be increased from at least Rs 500 crore to Rs 1,000 crore. At the same time, for SFB it increased from Rs 200 crores to 300 crores.