IBA to seek feedback on pvt bank norms

In view of the heavy opposition against the guideline barring more than 10 per cent holding by a single entity in a private bank, the Reserve Bank of India (RBI) has decided to frame a second set of draft guidelines on the issue which would be circulated soon.

The Indian Banks Association (IBA), a body representing all Indian banks in the country including private ones, is scheduled to meet CEOs of all private banks in the coming weeks. The meeting between private bankers has been called with the sole idea of conveying their views on the issue to the apex bank.

"We will convey views expressed by private bankers on the draft guideline to RBI after the meeting. Following this RBI will issue a second set of draft guideline taking into consideration the view points put forward by them," explained H S Sinor, chief executive, IBA. Private banks have said the draft guidelines were against the long term interest of investors which were wooed by the Indian government.

RBI, in its draft guidelines, had stated that, "In the interest of diversified ownership of banks, the objective will be to ensure that no single entity or group of related entities has shareholding or control, directly or indirectly, in any bank in excess of 10 per cent of the paid up capital of the private sector bank. Any higher level of acquisition will be with prior approval of RBI and in accordance with the guidelines for grant of acknowledgement for acquisition of shares."