RBI sets up P K Mohanty Panel to Review Ownership of Private Banks

On June 12, 2020, the Reserve Bank of India has constituted an internal working group. The working group is to review guidelines of ownership of private sector banks.

Highlights

The panel constituted by the apex bank is to examine regulations to hold financial subsidiaries through non-operative financial holding company. The group is to be headed by the Executive Director of RBI, P K Mohanty.

Functions

The Group is to examine the existing regulation and guidelines on ownership of private sector banks. Also, the panel will suggest appropriate norms to address the issue of concentration of control and ownership of banks. The group will also review the eligibility criteria of the individuals to apply for banking license.

The Group will also study the current regulations to hold financial subsidiaries through NOFHC (Non-Operative Financial Holding Company). It will also make recommendations to migrate all the banks towards a uniform regulation.

NOFHC

The NOHFC was formed in 2015 to separate financial activities carried out by the same company. This will help the company carry out other commercial and industrial activities.

The entities in public sector and private sector and in Non-Banking Financial Companies (NBFCs) shall set up bank that will be owned by NOFHC. The company formed is to be registered as NBFC.

Month: Current Affairs - June, 2020