RBI grants in-principle approval to IDFC, Bandhan for new bank licences

The Reserve Bank of India( RBI) on Wednesday granted "in-principle" approvals to Mumbai-based infrastructure lender IDFC and Kolkata- based micro-finance Bandhan Financial Services for new bank licences.

The RBI will also consider the application of India Post, but the central bank said it would done separately in consultation with the government.

This would be the first time in a decade that new banking licences are handed out, since the formation of Yes Bank in 2004.

There were 25 companies in the running.  Public sector unit IFCI and private players such as Anil Ambani group and Aditya Birla group were among the applicants. Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital had also applied.

The approval comes a day after the Election Commission (EC) cleared the decks for RBI to announce approvals for new banking licences.
The RBI had sought permission of the EC before announcing the awardees, as the model code of conduct is in place in the run up to the elections.

The "in-principle" approval granted will be valid for a period of 18 months during which the applicants have to comply with the requirements under the banking licence guidelines and fulfil the other conditions as may be stipulated by the RBI.

On being satisfied that the applicants have complied with the requisite conditions, the RBI would consider granting of a licence for commencement of banking business. Until a regular licence is issued, the applicants would be barred from doing banking business.

In February, the Bimal Jalan panel, which scrutinized applications for new bank licences, submitted its report to RBI.

MUMBAI: RBI on Wednesday said it has given in-principle approval to IDFC Ltd and Bandhan Financial Services to set up new banks in a country where about half of the households do not have access to formal banking services.

The Reserve Bank of India said the approval would be valid for 18 months during which the two financial firms will have to comply with the requirements laid down by the central bank, according to a statement.

The central bank said it will also consider th ..

Read more at:
http://economictimes.indiatimes.com/articleshow/33137000.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

MUMBAI: RBI on Wednesday said it has given in-principle approval to IDFC Ltd and Bandhan Financial Services to set up new banks in a country where about half of the households do not have access to formal banking services.

The Reserve Bank of India said the approval would be valid for 18 months during which the two financial firms will have to comply with the requirements laid down by the central bank, according to a statement.

The central bank said it will also consider th ..

Read more at:
http://economictimes.indiatimes.com/articleshow/33137000.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

MUMBAI: RBI on Wednesday said it has given in-principle approval to IDFC Ltd and Bandhan Financial Services to set up new banks in a country where about half of the households do not have access to formal banking services.

The Reserve Bank of India said the approval would be valid for 18 months during which the two financial firms will have to comply with the requirements laid down by the central bank, according to a statement

Read more at:
http://economictimes.indiatimes.com/articleshow/33137000.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

MUMBAI: RBI on Wednesday said it has given in-principle approval to IDFC Ltd and Bandhan Financial Services to set up new banks in a country where about half of the households do not have access to formal banking services.

The Reserve Bank of India said the approval would be valid for 18 months during which the two financial firms will have to comply with the requirements laid down by the central bank, according to a statement

Read more at:
http://economictimes.indiatimes.com/articleshow/33137000.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

No penalty for bank balance below minimum limit: RBI to banks

 

 

 

 

 

MUMBAI: Customers may soon be spared penalties for non-maintenance of minimum balances in savings accounts with the Reserve Bank India asking banks to cut down services on low-balance accounts and do away with fines. Banks however say the new regime will lead to higher charges on services for customers. 

In its first bi-monthly policy on Tuesday, RBI said that it proposes to frame comprehensive consumer protection regulations based on domestic experience and global best practices. "Banks should not take undue advantage of customer difficulty or inattention. Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to basic savings bank deposit accounts and restore the services when the balances improve to the minimum required level," RBI said. 

Many account holders who maintained dormant accounts, which were short of the Rs 10,000 insisted on by most private banks, found that their balances had vanished as the bank had deducted a penalty every quarter for not maintaining adequate balance.

Basic savings bank deposit accounts are those that have to be mandatory offered by banks without any minimum balance requirement. However, they can be used only for deposit and withdrawal of cash or receipt of money. There are no other services such as cheque books. 

Banks however say that new norms will hit customers as the sum of all charges for individual services for they avail will be higher than the penalty. "The consumer will end up paying more. On the minimum balance of Rs 10,000 we earn only Rs 400 against which we provide ATM transactions, statement and cheque book. The break-even for providing these services is minimum balance of Rs 30,000. The alternative is that we have to charge for these services as against the Rs 400 we earn on minimum balance and the customer may end up paying more than the penalty if he regularly uses cheques and other services," said Aditya Puri, MD, HDFC Bank. He added that this was not yet a directive and IBA has to get back to RBI with the viewpoint of banks that the customer may actually suffer," said Puri. 

"The direction is very clear. You create a set of accounts where you do not charge for not maintaining minimum balance but you will be entitled to only limited services. If you want more you will probably have to pay for it," said KR Kamath, chairman, Punjab National Bank and also head of the Indian Banks Association. RBI also said that in the interest of their consumers, banks should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. It has also asked banks to limit the liability of customers in electronic banking transactions in cases where banks are not able to prove customer negligence.

Source : http://timesofindia.indiatimes.com/