The government is considering amendment of the Banking Regulation Act to expand the powers of the RBI to enable so that it can seek information from entities involved in the insurance and asset management business, in addition to banks. The Bill is likely to be tabled in the Monsoon Session of Parliament
New Delhi: Corporates looking to enter the banking business will have wait for some more time, as the government is considering amendment of the Banking Regulation Act and Banking Laws Act before finalising the guidelines for giving new licenses, reports PTI.
The final guidelines on the new banking licences would be released only after the necessary amendments to the Banking Regulation Act and Banking Laws Act are cleared by Parliament, official sources said.
However, the draft guideline for the new banking licences would be out by the end of this month for public comments, sources added.
Sources added that empowering the Reserve Bank of India (RBI) is essential for obtaining information about the other businesses of the corporate houses seeking banking licences in order to protect depositors' interests.
The government, sources said, is considering amendment of the Banking Regulation Act to expand the powers of the RBI to enable so that it can seek information from entities involved in the insurance and asset management business, in addition to banks.
Sources said this is relevant, as the risks of companies involved in businesses like insurance and asset management may sneak into the banks' account books by virtue of the same parentage, sources said.
The Banking Regulation Amendment Bill is likely to be tabled in the Monsoon Session of Parliament.
At present, insurance companies are regulated by the Insurance Regulatory and Development Authority (IRDA) and the asset management business comes under the purview of the Securities and Exchange Board of India (SEBI).
After clearance of the Bill, the RBI would have the power to call for information and assess information, sources said, adding these powers are required if the private entities are allowed to enter into the banking space to protect the interest of depositors.
As per the current practice, India follows a subsidiary model where the non-banking businesses of a bank, like insurance and asset management, are subsidiaries. By virtue of this, risks attached to these businesses can impact the banking entity.
The apex bank had brought out a discussion paper in August 2010, on giving out new banking licenses to business houses and non-banking finance companies, besides regulations for the same to foster competition.
The RBI also sought to know "whether industrial and business houses could be allowed to promote banks."
Various entities like Reliance Capital, Indiabulls, Religare, IFCI and Aditya Birla Financial Services are said to be mulling an entry into the banking space.
India presently has 27 public sector banks, seven new private sector banks, 15 old private sector banks, 31 foreign banks, 86 regional rural banks, 4 local area banks, 1,721 urban cooperative banks, 31 state cooperative banks and 371 district central cooperative banks.
The penalty was imposed by Telecom Enforcement, Resource and Monitoring (TERM) Cells till January 2011 on various telecom service providers operating in different licence service areas for non-compliance of subscriber verification guidelines
New Delhi: Acting tough, the government has imposed fines of Rs700 crore on various telecom operators for carrying out illegal and clandestine activities in their services, particularly for non-compliance of the subscriber verification process, reports PTI.
The penalty was imposed by Telecom Enforcement, Resource and Monitoring (TERM) Cells till January 2011 on various telecom service providers operating in different licence service areas for non-compliance of subscriber verification guidelines, a home ministry report said.
The fine was imposed on defaulting entities which did not comply with government orders despite repeated warnings that 100% verification of each and every subscriber was absolutely necessary for interests of the country's security.
There have been several instances in the past where terrorists used mobile phone connections, which were issued without verification, to carry out terror acts in India.
"Consultations are regularly held with the service providers to streamline the guidelines. Apart from the fine, wherever the shortcoming is serious in nature and whenever necessary, local police even register cases against the defaulter," a home ministry official said.
Because of non-compliance of the government rules, the Centre had in the past suspended operations of pre-paid mobile connections in Jammu & Kashmir.
Cellular services to nearly 38 million pre-paid cell phone subscribers in Jammu & Kashmir, who comprise 60% of total clientele in the state, was restored only after seven telecom operators-Bharti Airtel, Vodafone Essar, Idea Cellular, Aircel, Tata Teleservices, Reliance Communications and state-run BSNL promised full compliance with the verification process.
The Hero Group had earlier this month signed definitive agreements with the PE firms-BC India Private Investors II, an affiliate of Bain Capital LLC, and Lathe Investment Pvt Ltd, a wholly-owned subsidiary of state-run Singapore Investment Corporation (Ventures) Pvt Ltd-for the stake sale in HIPL
New Delhi: Two private equity firms, BC India Investors II and Lathe Investment Pvt Ltd, will together pick up a 29% stake in Hero Investments Pvt Ltd (HIPL)-a promoter firm of the country's largest two-wheeler maker, Hero Honda-for Rs3,650 crore, reports PTI.
The Hero Group had earlier this month signed definitive agreements with the PE firms-BC India Private Investors II, an affiliate of Bain Capital LLC, and Lathe Investment Pvt Ltd, a wholly-owned subsidiary of state-run Singapore Investment Corporation (Ventures) Pvt Ltd-for the stake sale in HIPL.
"Subject to all necessary clearances, these two investors shall collectively invest around Rs3,650 crore for approximately a 29% stake in HIPL, which will own 43.33% of Hero Honda Motors post-acquisition of Honda's stake," a senior Hero Group official told PTI.
HIPL is one of the main shareholders in the country's largest two-wheeler maker, Hero Honda. It held a 17.33% stake in the company as of 31 December 2010.
Last month, the Foreign Investment Promotion Board (FIPB) had referred a proposal by the Hero Group to bring in Rs4,500 crore foreign equity in HIPL to the Cabinet Committee on Economic Affairs for approval, as it involves an investment exceeding Rs1,200 crore.
The BM Munjal-led Hero Group is to pay Rs3,841.83 crore to buy out Honda's 26% stake in their joint venture, Hero Honda.
The group said the funds raised from the PE firms will be used to retire a significant portion of the debt that has been raised by HIPL recently for financing the acquisition of Honda Motor Company's stake in Hero Honda.
In December, the two companies mutually agreed to part ways in the 27 year-old joint venture, where the Indian partner also holds a 26% stake.