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Showing posts with label new bank licences. Show all posts
Showing posts with label new bank licences. Show all posts

Monday, 2 May 2016

08:11

Ujjivan to open 100 branches to meet small bank licence norms

Ujjivan to open 100 branches to meet small bank licence norms

Microfinance firm Ujjivan Financial Services Ltd, which launched a Rs.885 crore initial public offering (IPO), will open 100 bank branches to meet the regulatory norm for a small bank licence.
“We need to have 25% of bank branches in unbanked areas. Currently, we have none. Due to operational factors our existing branches are mostly next to PSU (public sector undertaking) bank branches. We propose to set up about 100 branches in unbanked locations,” Ujjivan managing director and chief executive Samit Ghosh told PTI.
He said the identification process for such new branches had begun and the company which would become the holding company for the proposed Ujjivan Small Bank would meet the criteria once the bank is launched.
Ghosh had said the bank would be launched by April 2017. Another requirement which Ujjivan has to fulfil is to bring down the foreign holding to 49% or lower.
“According to regulatory requirement, the foreign holding in the small bank has to be less than 49%. IPO is the first step towards transformation to a small bank. Foreign shareholding has come down to 77% following a pre-IPO placement. The IPO will help reduce further to 44-45%,” Ghosh said.
Ujjivan has about 11.15% market share of the non-banking financial company and microfinance institution sector in the country with some 470 branches spread across 24 states.
“The entire business will be moved to the bank. Some 40% of our existing 470 branches spread across 24 states will be brought under the bank branches in the initial phase,” Ujjivan strategy executive Rajat Singh said.
Ujjivan officials said the staff strength will be increased with the proposed small bank licence to around 10,000 from 7,862 employees.

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Wednesday, 21 October 2015

08:20

RBI to provide more bank licences, says S S Mundra

RBI to provide more bank licences, says S S Mundra

Having allowed 23 new entities to enter the banking space, Reserve Bank of India (RBI) today said it plans to grant more licences to promote financial inclusion.

“You already have two new universal banks, you may have around 11 payment banks, you may have 10 small finance banks, and going forward, it can be a continuing activity where new players are released into the arena by Reserve Bank, if everything goes as per the planning,” RBI Deputy Governor S S Mundra said here.

“So there would be a large number of new players coming in. I think the key to financial inclusion is that all these players are taken into the national plan of financial inclusion in an orderly manner,” he said.

IDFC and Bandhan Financial Services emerged successful out of 25 contenders for universal bank licences issued by the RBI in April last year. These entities have already started their operations.

Besides, RBI has given in-principle nod to 10 entities to set up Small Finance Banks to provide basic banking services to small farmers and micro industries.

In August, the central bank had granted approval to 11 entities for launching Payments Banks.

To further the objective of financial inclusion, Mundra emphasised the need for structural reform in the agriculture sector.

“There are now limitation of credit absorption capacity of farm sector until and unless we bring in structural reforms in farming,” he said at an event organised by India Today Group.

Those structural reform would be in terms of more land under cultivation, pooling of land and advance area of farming, he said.

Mundra said there has been improvement in savings in the last few months.

“If there is persistent high inflation rate then the people would move towards other assets rather than financial savings,” he said.

On NPAs, he said it is localised phenomena and limited to few sectors.

 Source:BankingUpdates.
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