Reserve Bank of India (RBI) - Draft Guidelines for “Licensing of New Banks"

A few of the key features of the draft guidelines are promoters of banks should be entities Indian residents with sound credentials and integrity and having successful track record of at least 10 years, with the exception of real estate firm.

The new bank will have to be housed as a wholly owned Non-Operative Holding Company (NOHC) and be registered with the Reserve Bank, the bank will have minimum capital requirement of Rs 500 crore.

NOHC must hold minimum 40% of the paid-up capital of the bank for a period of five years from the date of licensing of the bank. Foreign shareholding the aggregate non-resident shareholding in the new bank shall not exceed 49% for the first 5 years after which it will be as per the extant policy.

To ensure high quality corporate governance RBI has recommended that atleast 50% of the directors of the NOHC should be independent directors and banks exposure to any entity of the promoter group shall not exceed 10% and the aggregate exposure to all the entities in the group shall not exceed 20% of the paid-up capital and reserves of the bank.

for reference : - http://rbidocs.rbi.org.in/rdocs/Content/PDFs/FIDGN290811.pdf