CLOSE X
Algo Trading
Home

Blogs

Stock Market Blogs

New highs for private sector banks amidst RBI’s Ownership guidelines November 24 2020RBI

Visit Count: 991

The scenario of private sector banks saw considerable changes post the RBI’s ownership guidelines.

On Monday, banks, non-banking finance companies (NBFCs) and microfinance institutions (MFIs) traded near multi-year highs in financial stocks. In the early morning trade on BSE, banking and non-banking shares grew up to 20%. Shares of financial companies after the internal working group (IWG) of the Reserve Bank of India (RBI) reviewing the corporate structure of private sector banks proposed sweeping changes in bank ownership, enabling large corporate and industrial houses to own banks by amending the Banking Regulation Act, 1949.

Recommendations were provided by the panel on the promoter's shareholding in private banks, including minimum capital requirements for new banks. It has also suggested that well-run large NBFCs with total assets of Rs50,000 crore and above may be considered for bank conversion, while payment banks may after three years of being in operation, be permitted to convert into small finance banks (SFBs).

Below are some significant recommendations of RBI

·        The ceiling on the long-term stake of promoters (15 years) may be lifted from the current level of 15% to 26% of the bank's paid-up voting equity shares.

·        With respect to non-promoter shareholding, all forms of shareholders may be subject to a uniform limit of 15% of the bank's paid-up voting equity shares.


·        Well managed large non-banking financial companies (NBFCs) with an asset size of approximately Rs50,000 crore and above, including those owned by a corporate house, may be considered for conversion into banks subject to the completion of 10 years of operations and the fulfilment of due diligence requirements and compliance with the additional conditions set out in this respect.

·        The minimum initial capital required for licensing new banks should be enhanced from ? 500 crore to about ?1,000 crore for universal banks, and from ?200 crore to about ? 300 crore for SFBs.

·        Although banks licensed prior to 2013 may at their discretion, transfer to the NOFHC (Non-Operative Financial Holding Company) structure once the NOFHC structure has obtained a tax-neutral status, all banks licensed prior to 2013 shall move to the NOFHC structure within five years of the tax-neutrality announcement.

·        RBI can take measures to ensure harmonization and continuity in the various licensing guidelines to the extent practicable. 

Private sector banks have quickly gained market share from around 18 % (2015) to around 30% (2020) over the last five years, and we see this trend accelerating at a faster pace now.

JM Financial reported that it was strongly positive for IndusInd, IDFC Ltd, Equitas Holding, Ujjivan Financial, Equitas SFB, Ujjivan SFB, and marginally positive for RBL, DCB, Kotak, ICICI Bank and Neutral for HDFC Bank and Bandhan on the report of the RBI Internal Committee.

COMMENTS
Form
Categories
Blog Enquiry

Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

6. Risk disclosures RISK DISCLOSURES ON DERIVATIVES:

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

Dear Investor,
As you are aware, under the rapidly evolving dynamics of financial markets, it is crucial for investors to remain updated and well-informed about various aspects of investing in securities market. In this connection, please find a link to the BSE Investor Protection Fund website where you will find some useful educative material in the form of text and videos, so as to become an informed investor.
https://www.bseipf.com/investors_education.html
We believe that an educated investor is a protected investor !!!

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on dp@indiratrade.com by today EOD."
REGISTRATION NOS:

INDIRA SECURITIES PRIVATE LIMITED (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201

DISCLAIMER:

"INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING."

INVESTORS GRIEVANCE

Indrendu Joshi. Email: compliance@indiratrade.com. Call : 0731-4797275

Investor grievance complaint : complaint@indiratrade.com

INVESTOR CHARTER