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Sensex jumps 282 pts led by banks, financials; Nifty ends at 12,859; RIL slips
Benchmark indices ended with gains after a day of losses with Sensex clocking 282 points and Nifty rising 0.7%. RIL was the biggest loser, while Bajaj Finserv was the best gainer.
Gland Pharma jumped 21% in market debut: RBI panel submits report.
A Reserve Bank of India panel on Friday recommended giving banking licences to large industrial houses, potentially allowing the Aditya Birla group, the Tata group and Reliance Industries Ltd to apply for banking licences.
The panel has also suggested that large non-bank lenders with asset sizes of more than ₹50,000 crore, including those owned by corporates, should be considered for conversion into banks, provided they have completed 10 years of operation. The proposal, if accepted, will make Bajaj Finance Ltd, L&T Finance Holdings Ltd, Shriram Transport Finance Ltd, Tata Capital Ltd and Mahindra and Mahindra Financial Services Ltd prime contenders for banking licenses.
The changes will require amendments to the Banking Regulation Act.
The panel also suggested that payments banks can convert into small finance banks after three years of operations, potentially benefiting Paytm, Jio and Airtel payments banks.
The panel, headed by RBI executive director P.K. Mohanty, was set up in June to review ownership guidelines and corporate structure for Indian private sector banks. RBI has sought comments on the draft report by 15 January.
The panel also suggested raising the cap on promoter stake in private sector banks to 26% of the paid-up equity after 15 years of operation. Existing norms mandate private bank promoters to cut their ownership to 40% within three years and to 15% in 15 years.
The panel suggested bringing down the promoter holding to below 26% any time after the first five years of lock-in. For non-promoter shareholding, the current long-run shareholding guidelines may be replaced by a simple cap of 15% of the paid-up voting equity share capital of the bank, the committee said.
The panel also suggested that a non-operative financial holding company (NOFHC) structure should continue as the preferred route for all new banking licences. Banks currently under NOFHC may be allowed to exit from such a structure if they do not have other group entities in their fold. Banks licensed before 2013 may move to a NOFHC structure at their discretion, once the NOFHC structure attains a tax-neutral status.
The panel also suggested capping of banks’ investment in any new or existing entity to 20%. However, they may be permitted to make total investments in a financial or non-financial services company, which is not a subsidiary or joint venture or associate up to 20% of the bank’s paid-up share capital and reserves.
It suggested increasing the initial paid-up capital or net worth required to set up a new universal bank to ₹1,000 crore; for SFBs to ₹300 crore and for urban cooperative bank transiting to SFBs, it is ₹300 crore in five years.
Gland Pharma Ltd, the first Indian company with a Chinese promoter to go public, made a robust debut on the stock markets on Friday, with its shares closing over 21% above issue price.After opening at ₹1,701, a 14% premium to the issue price of ₹1,500, the stock rose further to close at ₹1,820.45, a 21.36% gain from the issue price.
41 arrested in fake invoice case; three CAs face disciplinary action
Petrol, diesel prices go up today after nearly two months.
Since RBI panel has suggested that large corporate companies may be allowed to start banks, the large NBFCs and large corporate company -shares may go up. The Private sector Banks also may see some uptick.
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