Mumbai: With the Reserve Bank of India (RBI) relaxing norms, major corporate houses are likely to be allowed to open private banks.
According to reports, the government is considering opening up the banking sector for more private players by relaxing some of the rules for the participation of corporate houses in setting up new banks.
The RBI is planning to allow some big industrial behemoths to set up full-service private banks, the reports said.
At present, industrial houses having less than 60% of their turnover from non-financial entities are not allowed to apply for bank licenses. Their participation is also allowed for 10% equity only. For this, the existing policies could be modified.
Policymakers are now said to be considering allowing foreign banks that have Indian subsidiaries to participate in the sale of the government’s stake in some of the public sector banks.
Recently, the RBI had announced that the corporate sector could set up payments banks for the first time.
The RBI’s internal working group, in a report on the ownership guidelines and corporate structure for Indian private sector banks, also favored more and bigger private sector banks, the reports added.