RBI sets holding company rider for bank licence

The Reserve Bank of India will allow a promoter or a promoter group to establish new banks if they set up a holding company, which will own the bank and all other financial services companies regulated by the central bank or other financial sector regulators. The rules will come into force only after a public discussion. number of promoters such as the Tatas, the Aditya Birla Group and Mahindra and Mahindra are keenly awaiting final guidelines, which are likely to be released by the end of this month, as many have shown interest in starting a bank in India.

But the draft rules say groups that derive 10% of their 'income' from broking or real estate shall not be eligible. This may hit the plans of financial services companies with big brokerage units seeking to enter banking.