relid=91116 Beside above, the Bill would pave the way for new bank licenses by RBI resulting in opening of new banks and branches. This would not only help in achieving the goal of financial inclusion by providing more banking facilities but would also provide extra employment opportunities to the people at large in the banking sector. The salient features of the Bill are as follows: • To enable banking companies to issue preference shares subject to regulatory guidelines by the RBI; • To increase the cap on restrictions on voting rights; • To create a Depositor Education and Awareness Fund by utilizing the inoperative deposit accounts; • To provide prior approval of RBI for acquisition of 5% or more of shares or voting rights in a banking company by any person and empowering RBI to impose such conditions as it deems fit in this regard; • To empower RBI to collect information and inspect associate enterprises of banking companies; • To empower RBI to supersede the Board of Directors of banking company and appointment of administrator till alternate arrangements are made; • To provide for primary cooperative societies to carry on the business of banking only after obtaining a license from RBI; • To provide for special audit of cooperative banks at instance of RBI by extending applicability of Section 30 to them; and • To enable the nationalized banks to raise capital through “bonus” and “rights” issue and also enable them to increase or decrease the authorized capital with approval from the Government and RBI without being limited by the ceiling of a maximum of Rs. 3000 crore under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980.
keep a close watch on the functioning of all private banks. so that these additional voting rights serve the interest of all stakeholders equitably. But a subsection to Section 7 clearly says that the above prohibition shall not apply to a primary credit society. who have been sitting on the sidelines so far in respect of investingin these banks. This cap is now proposed to be raised to 10%. The RBI should. which may or may not be in the best interest of the bank and its other stakeholders. On the one hand. Minimum Listing Requirements for New Companies The following eligibility criteria have been prescribed for listing of companies
. ebanking f or ebanker f by any cooperative society other than a cooperative bank. paving the way for more investment in public sector banks by the foreign institutional investors. This in effect means that the promoters and their group can have voting powers up to 26%. On the other hand.html
The bill raises the voting rights in banks At present there is a cap of 1% on voting rights to private investors in public sector banks. A primary credit society is any cooperative society other than a primary agricultural credit society. 1. therefore. in fact. is a double edged sword. which is now proposed to be raised to 26% through this bill. Its principal business is transaction of banking business and its paid-up share capital and reserves are less than Rs 1 lakh. there is a cap of 10% on voting rights to investors in private sector banks.moneylife. it gives the promoters a better say in the management of the bank and coupled with the higher commitment of the promoters it could be a spring board for the faster growth of the bank. This in effect means that the private investors had no meaningful role to play in the functioning of the bank even as a shareholder.http://www. Similarly. which.in/article/banking-amendment-bill-what-are-its-benefits-to-the-bankingpublic/30304. it can influence the decisions of the management. Section 7 of the Banking Regulation (BR) Act prohibits use of words ebanks f.
25 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price). o Companies Act 1956
.on BSE. and The minimum issue size shall be Rs. the securities of the issuer would not be listed on BSE. shall not be in default in compliance of the listing agreement. 2009. the issuers shall be required to include in the disclaimer clause forming a part of the offer document that in the event of the market capitalization (product of issue price and the post issue number of shares) requirement of BSE not being met. Further :
In respect of the requirement of paid-up capital and market capitalization. The Issuer shall comply to the guidance/ regulations applicable to listing as bidding inter alia from o Securities Contracts (Regulations) Act 1956 o Securities Contracts (Regulation) Rules 1957 o Securities and Exchange Board of India Act 1992 o And any other circular. 10 crore for IPOs & Rs. The above eligibility criteria would be in addition to the conditions prescribed under SEBI (Issue of Capital & Disclosure Requirements) Regulations. The applicant. and The minimum market capitalization of the Company shall be Rs. clarifications. promoters and/or group companies. guidelines issued by the appropriate authority.3 crore for FPOs. 10 crore. through Initial Public Offerings (IPOs) & Follow-on Public Offerings (FPOs):
The minimum post-issue paid-up capital of the applicant company (hereinafter referred to as "the Company") shall be Rs.
000 crore with the stipulation that promoter should bring in the amount within a period of five years. "Considering the heavy investment needed for technology up gradation for the future purposes. Further. The central bank is currently working on the final guidelines for new bank licences. it said to help foreign shareholders to form their long-term investment decisions. there can be a stipulation suggesting that minimum capital requirement shall be hiked to Rs 1.000 crore from Rs 500 crore within five years of starting the bank.
. there is a need for clarity on what would be the status of limit of FII holding after first five years. However.NEW DELHI: Minimum investment limit for obtaining a bank licence should be pegged at Rs 1. This can help to ensure only serious and resourceful entities are eligible to apply. It said that new banks may have to invest heavily in technology and to take steps to achieve financial inclusion and to scale up the operations on viable lines over time. On the matter of foreign shareholding in the bank. It also said the mandatory requirement of new bank to get listed within two years of licensing is not pragmatic and feasible and the time period should be increased to five years. in its draft report on new bank licences has stipulated a minimum investment of Rs 500 crore for getting a bank licence. the chamber welcomed the cap of 49 per cent for the first five years. said industry chamberAssocham." it said in a statement. it added that there should be some method by which the banks are compensated suitably for the lower profitability from the branches in unbanked areas. The RBI.