The Reserve Bank of India (RBI) will soon release the final guidelines on issuing new bank licences, said deputy governor Anand Sinha on Monday. Sinha, however, refrained from giving a timeframe.
The RBI released the draft guidelines in August 2011 and said that the amendment to the banking Bill is essential for the guidelines to be framed.
The Banking Bill amendment was passed in the winter session of Parliament. Besides the guidelines for new bank licences, final norms for non-banking finance companies are also awaited. The RBI deputy governor interacted with industry players at a conference on the NBFC guidelines on Monday.
Sinha said that the central bank would take note of the concerns of the companies in framing the final guidelines.
Representatives of NBFCs said that the guidelines must be aligned with that of the banks for a level-playing field rather than making them more stringent for NBFCs.
Further, NBFCs said that risk weights must also be realigned and lowered for assets that have low risk.
?We finance many assets which are low risk, all of which qualify for lower risk weights,? said Sirnivasa Raghavan, MD, Sundaram Finance.
In the draft guidelines, the RBI has proposed a risk weight of 150% on capital market exposure and 125% for commercial real estate exposure for NBFCs not sponsored by banks.
In the draft norms, the central bank also proposes stringent entry point norms and a Tier-I capital adequacy of 7.50% for NBFCs and 10% for infrastructure financing companies.
Sinha said the draft guidelines are not onerous on NBFCs. Nevertheless, issues faced by the companies will be looked into. The RBI released draft guidelines for NBFCs in December and has invited comments from stakeholders by January 10.
