Business Daily from THE HINDU group of publications
Friday, Sep 07, 2007
ePaper
Business Daily from THE HINDU group of publications Friday, Sep 07, 2007 ePaper |
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Money & Banking
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Financial Services
Our Bureau Mumbai, Sept. 6 Bankers are of the view that the ‘intermediate holding company’ being proposed by banks such as ICICI Bank and SBI can be set up as regulated entity under the Reserve Bank of India. The RBI, in a discussion paper recently, expressed fears that the holding company as being proposed would be unregulated entity with potential risks. At a meeting convened by IBA on Thursday to discuss the subject, bankers felt that the proposed entity can be incorporated as an NBFC or a pure investment company. Mr H. N. Sinor, Chief Executive, IBA, said that some of the concerns raised by RBI were genuine and banks need to discuss how to overcome them. Mr Sinor said, “It can be an NBFC or a pure investment company, under the full supervision and regulation of RBI.” Banks should be asked to take RBI approval for any subsidiary and the central bank can lay down any condition, which banks are bound to follow, he added. He said home-grown banking companies, which are on their way to becoming conglomerates need capital; and until they can have an apex holding company (which can raise funds), they need to look at ways of raising capital by unlocking the value. “Therefore we feel that an intermediate holding company is the best option,” Mr Sinor said. IBA’s management committee would meet on September 13 to discuss the issue again after which IBA would submit its proposal to RBI on September 14, Mr Sinor said .
Related Stories: Plans of ICICI Bank, SBI may face RBI hurdle ICICI Bank to set up new arm for insurance, MF biz Holding co formation: SBI ‘putting everything in place’ More Stories on : Financial Services | RBI & Other Central Banks | State Bank of India | ICICI Bank Ltd
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