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RBI report: Doors could be finally open to large business houses to launch banks

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4 years ago

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RBI report: Doors could be finally open to large business houses to launch banks

The big takeaway from the report of the Reserve Bank of India (RBI)’s internal working group (IWG) on ownership guidelines for private banks is the proposal to allow large corporate and industrial houses to promote private banks.

In the past, the RBI has been largely hesitant to let large businesses promote banks.

In the previous rounds, when the RBI had issued private bank licences, the banking regulator had permitted corporate houses to apply, but turned down their applications, and preferred financial institutions which had experience in banking transactions.

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That approach may change now.

The proposal, however, comes with certain riders. According to the IWG recommendations, large corporate/industrial houses may be allowed as promoters of banks only after necessary amendments to the Banking Regulation Act, 1949.

This is aimed at preventing connected lending and exposures between the banks and other financial and non-financial group entities and strengthening of the supervisory mechanism for large conglomerates, including consolidated supervision.

The other major takeaway from the proposals is to allow large non-banking financial companies (NBFCs) to convert into banks. Well-run large NBFCs, with an asset size of Rs50,000 crore and above, including those which are owned by a corporate house, may be considered for conversion into banks, subject to completion of 10 years of operations and meeting due diligence criteria and compliance with additional conditions specified in this regard.

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This too will help many corporate houses running NBFCs under their fold to become banks if they wish to do so.

The last time (2013-14) when the RBI invited applications for new private banks, a host of corporates including Tata Sons; the Aditya Birla Nuvo, part of the Aditya Birla conglomerate; L&T Finance Holdings, part of India’s largest engineering conglomerate Larsen & Toubro; Reliance Capital; and INMACS Management Services Ltd, which provides management consultancy, corporate finance, audit, tax, and legal advisory services, had applied for permits.

Only Bandhan and IDFC got licences.

There seems to be an attempt for consensus with respect to the percentage of stake the private bank promoter can eventually hold. The cap on promoters’ stake in the long run (15 years) may be raised from the current level of 15 per cent to 26 per cent of the paid-up voting equity share capital of the bank, the RBI group has said.

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As regards non-promoter shareholding, a uniform cap of 15 per cent of the paid-up voting equity share capital of the bank may be prescribed for all types of shareholders, the proposals said.

There were tussles between private bank promoters and the regulator with respect to promoter holding. Private sector lender, Kotak Mahindra Bank had taken the regulator to court in connection with a dispute on promoter Uday Kotak’s holding. The RBI let the promoters, Uday Kotak and family, retain 26 percent stake, but capped the voting rights at 15 percent.

Similarly, the RBI had taken some punitive actions on Bandhan Bank for failing to reduce promoter holding. The restrictions were withdrawn after the bank complied with the regulations.

Overall, the IWG group recommendations address some of the contentious issues with respect to ownership norms of private banks.

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Also Read: BIGG BOSS 14: KAMYA PUNJABI COMPARES KAVITA KAUSHIK TO SIDHARTH SHUKLA, CALLS PAVITRA’S OUTBURST ‘JOKE OF THE SEASON’

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HT Rewind 2024: Teja Sajja says HanuMan kicking off the year in style is the moment he’d been ‘waiting for’ | Exclusive

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1 day ago

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December 21, 2024

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HT Rewind 2024: Teja Sajja says HanuMan kicking off the year in style is the moment he’d been ‘waiting for’ | Exclusive

In conversation with Hindustan Times, Teja Sajja decodes the success of HanuMan and other Telugu films, talks about his upcoming projects, and more.
When Prasanth Varma’s superhero film HanuMan, starring Teja Sajja, was announced to be released alongside big films like Mahesh Babu’s Guntur Kaaram, Venkatesh’s Saindhav and Nagarjuna’s Naa Saami Ranga in January this year, no one expected the underdog to emerge on top. And yet, the film, made on a budget of under ₹50 crore, managed to collect over ₹300 crore at the box office worldwide in 25 days, becoming one of the highest-grossing Indian films for the year. (Also Read: Ranveer Singh met HanuMan actor Teja Sajja, complimented him even after his Prasanth Varma film Rakshas got shelved)

Ask Teja about the moment he realised his film had not just fought against the tide but also risen to the top; he tells Hindustan Times in an exclusive conversation, “Since I returned to acting (as a lead actor after being a child artiste since 1998), this is the moment I’ve been waiting for. When everything from the HanuMan teaser to the songs was grabbing attention, we knew we had hit a gold mine. But I don’t think we imagined it would cross the ₹300 crore threshold. We were so satisfied with the opening numbers; everything else was a bonus.”

‘Success has given me fear of disappointing people’

Teja acted in Zombie Reddy, Ishq and Adbhutham before HanuMan, but they are what you would call ‘critical successes’, adding to his repertoire as an actor who can perform. But things have changed for him now, says Teja, who is being picky about the roles he says yes to. “Success either makes you overconfident or gives you the fear of disappointing people; I have the latter,” he explains.

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Teja admits he wants to chart out his career in Hrithik Roshan’s footsteps, but not in the way you think. “I have such a fondness for Hrithik due to Koi Mil Gaya and Krrish. No matter how well he performed after that, these left a lasting impression on me; I’m sure 90s kids will agree,” he says, adding, “Similarly, I’ve realised that I have an audience in children now. I want to be conscious of that when I pick roles. I want to make films families can enjoy together.”

But despite people in places like Mumbai or Delhi recognising him, Teja says he’s clear that he wants to cater to the Telugu audience first. “I am conscious that I am making films for my playground – the Telugu states. This is the sensibility I have grown up with, and I don’t know if I can cater to everyone else. Will I promote my films in other languages? Sure. But I also can’t be part of films that aren’t authentic to what I know or understand,” he explains.

‘Rootedness has put us on the world map’

And authenticity seems to be the need of the hour. Be it Baahubali and RRR or the recently released Pushpa 2: The Rule, Kalki 2898 AD and Devara: Part 1, certain kind of stories seem to be finding success. “Rootedness and going local is proving to be such a boon for us, be it in Devara or Pushpa or HanuMan. Kalki 2898 AD was our version of a Hollywood film (the sci-fi concept) with actors from across languages in predominant roles; it put us on the world map,” reflects Teja.

However, the actor admits Tollywood went through a phase of Bollywood-inspired rom-coms and family dramas that worked in their favour for a while. “That wasn’t easy to replicate either, but it’s just that these local stories are what the audience seems most interested in now. It can’t just be chalked up to religion, too. It’s about the morals these films are hinged on, the fighting for righteousness, and how an underdog can find their strength. Introducing Mahabharata or Ramayana to a new audience in a cool way is just a perk,” he says.

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And it’s this rootedness that Teja says his next films, Mirai and Jai Hanuman (the sequel to HanuMan), will also have ample of. “Mirai is also a superhero film that caters to kids, but it’s not an origin story like HanuMan. It has a pan-Asian and Buddhist touch because the story is based on King Ashoka’s ideologies. I hope that I will get to deliver something new to the audience again. I will only feel like I’ve arrived if Mirai is equally, if not more, successful,” says Teja.

Rishab Shetty will headline Jai Hanuman, but Teja also looks forward to shooting that. “I can’t wait to be on that set; it’ll be exciting. Now that we know India is ready to watch our films, I want to step it up. I want to shift gears and shoot for at least two films in 2025,” he says. As for what he will do next, Teja says he wants to up the ante. “When I got a SIIMA award for Zombie Reddy as a debutant, I remember telling Prasanth this would be the last award I get. But now that I won a Radio City Cine Award for Best Actor, I hope more awards will follow,” he signs off cheekily.

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