Non Operative Financial Holding Company 2013 NOFHC By RBI

Non Operative Financial Holding Company 2013

Any Indian-owned corporate can apply

The Reserve Bank of India (RBI), has issued final guidelines for setting up of new banks in the private sector, including corporate houses and non-banking finance companies (NBFCs), through a wholly-owned Non-Operative Financial Holding Company (NOFHC). Public sector companies are also eligible to apply.

The RBI will allow applicants for new licences until July 1. The initial minimum paid-up voting equity capital for a bank would be Rs.500 crore.

The NOFHC would initially hold a minimum of 40 per cent of the paid-up voting equity capital of the bank which would be locked for five years and which would be brought down to 15 per cent within 12 years.

The aggregate foreign shareholding in the new bank would not exceed 49 per cent for
the first five years after which it would be as per the extant policy.

At least 50 per cent of the directors of the NOFHC would be independent directors.

The NOFHC and the bank would not have any exposure to the promoter group.

The new banks should open at least 25 per cent of its branches in un-banked rural centres
(population up to 9,999 as per the latest census).

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