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Wednesday, November 23, 2011

Licensing of new banks: Industry bodies seek changes in listing norms

Apex industry associations such as Ficci and Assocham have urged the RBI to increase the time-limit for listing of shares by new banks in the private sector to at least five years.

The draft guidelines for ‘licensing of new banks in the private sector' stipulates that new banks should get listed on the stock exchanges within two years of licensing.

This stipulation is not pragmatic and feasible as the new banks may take considerable time to establish their operational and strategic performance, Assocham said in a note to the RBI.

The FICCI said the time limit should be increased to five years as banks' operations would take at least five years to reach a level of stability.

Assocham has also made a case for granting banking licences to stock broking companies. The draft guidelines stipulate that entities in real estate and stock broking would not be eligible for banking licences.


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