New bank licences: Jalan panel submits proposals
26 Feb 2014 5:58 AM IST
‘We have submitted report (on new bank licences) to RBI,’ Jalan, a former Reserve Bank Governor, said after a four-hour meeting here. The report contains names of entities eligible for bank licences. It was not immediately known how many applicants have been shortlisted by the high-level advisory panel. The committee started evaluating applications at its first meeting on 1 November.
Other members of the committee are former RBI Deputy Governor Usha Thorat, former Securities and Exchange Board of India Chairman C B Bhave and Director of the Central Board of Directors of the RBI Nachiket M Mor. Guidelines for setting up new private banks were issued in February 2013. The last day for applications was 1 July. The RBI received 27 applications and subsequently, Tata Sons Ltd and Value Industries Ltd withdrew. Public sector units India Post and IFCI and private sector Anil Ambani group and Aditya Birla group were among the 25 players in the fray for bank licences. Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital have also applied.
In the past 20 years, the RBI has licensed 12 banks in the private sector in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993. Kotak Mahindra Bank and Yes Bank were the last two entities to get banking licences from the RBI in 2003-04. In the 2001 round of guidelines for new licences, the committee members were C G Somiah, former government auditor CAG, I G Patel, former RBI Governor, and Dipankar Basu, former head of State Bank of India. India has 27 public sector banks, 22 private sector banks and 56 regional rural banks.
Listed firms must seek shareholder nod for divesting in key arms: Sebi
New Delhi: Listed companies will soon have to seek the approval of shareholders to divest shares in subsidiaries that bring in more than one-fifth of annual consolidated income. Market regulator Sebi’s proposal is part of efforts to strengthen corporate governance and curb misdoings at the management level.
The proposal to make it mandatory for listed companies to get shareholder approval for divestment in key subsidiaries also comes in the backdrop of ownership of subsidiaries being transferred to controlling stakeholders without keeping others in the loop. Under existing rules, divestment in major subsidiaries does not require the approval of shareholders. The Securities and Exchange Board of India has recommended that all listed companies should have a policy to determine material subsidiaries and they should be disclosed to the stock exchanges. A subsidiary shall be considered ‘material’ if the investment of the company in the unit exceeds 20 per cent of its consolidated net worth as per the audited balance sheet of the previous financial year.
The classification would also be applicable if the subsidiary generated 20 per cent of the consolidated income of the company during the previous financial year. The requirement is expected to be part of Sebi’s new set of corporate governance norms for listed companies that would come into effect from 1 October. In their suggestions on the matter, various stakeholders had said that major subsidiaries should be defined and should include Indian, foreign and step-down units.
It was also suggested that certain minimum amount of information about proposed disinvestment in subsidiaries, including financial details for the past three years, the consideration as well as reasons, should be disclosed in the notice for the meeting to seek shareholder nod for the resolution.
Other members of the committee are former RBI Deputy Governor Usha Thorat, former Securities and Exchange Board of India Chairman C B Bhave and Director of the Central Board of Directors of the RBI Nachiket M Mor. Guidelines for setting up new private banks were issued in February 2013. The last day for applications was 1 July. The RBI received 27 applications and subsequently, Tata Sons Ltd and Value Industries Ltd withdrew. Public sector units India Post and IFCI and private sector Anil Ambani group and Aditya Birla group were among the 25 players in the fray for bank licences. Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital have also applied.
In the past 20 years, the RBI has licensed 12 banks in the private sector in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993. Kotak Mahindra Bank and Yes Bank were the last two entities to get banking licences from the RBI in 2003-04. In the 2001 round of guidelines for new licences, the committee members were C G Somiah, former government auditor CAG, I G Patel, former RBI Governor, and Dipankar Basu, former head of State Bank of India. India has 27 public sector banks, 22 private sector banks and 56 regional rural banks.
Listed firms must seek shareholder nod for divesting in key arms: Sebi
New Delhi: Listed companies will soon have to seek the approval of shareholders to divest shares in subsidiaries that bring in more than one-fifth of annual consolidated income. Market regulator Sebi’s proposal is part of efforts to strengthen corporate governance and curb misdoings at the management level.
The proposal to make it mandatory for listed companies to get shareholder approval for divestment in key subsidiaries also comes in the backdrop of ownership of subsidiaries being transferred to controlling stakeholders without keeping others in the loop. Under existing rules, divestment in major subsidiaries does not require the approval of shareholders. The Securities and Exchange Board of India has recommended that all listed companies should have a policy to determine material subsidiaries and they should be disclosed to the stock exchanges. A subsidiary shall be considered ‘material’ if the investment of the company in the unit exceeds 20 per cent of its consolidated net worth as per the audited balance sheet of the previous financial year.
The classification would also be applicable if the subsidiary generated 20 per cent of the consolidated income of the company during the previous financial year. The requirement is expected to be part of Sebi’s new set of corporate governance norms for listed companies that would come into effect from 1 October. In their suggestions on the matter, various stakeholders had said that major subsidiaries should be defined and should include Indian, foreign and step-down units.
It was also suggested that certain minimum amount of information about proposed disinvestment in subsidiaries, including financial details for the past three years, the consideration as well as reasons, should be disclosed in the notice for the meeting to seek shareholder nod for the resolution.
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