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

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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.

That approach may change now.

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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.

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

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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.

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.

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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.

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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The Madras High Court has granted early screenings of Vijay’s Leo movie from 7 AM, requesting the TN government to resolve any issues.

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The Madras High Court has granted early screenings of Vijay’s Leo movie from 7 AM, requesting the TN government to resolve any issues.

Madras High Court Grants Early Screenings of Vijay’s “Leo” Movie at 7 AM, Urges TN Government to Address Concerns

The Madras High Court has made a landmark decision in favor of the much-anticipated Tamil film “Leo,” starring actor Vijay. In a significant move, the court has granted permission for early screenings of the movie from 7 AM, urging the Tamil Nadu government to swiftly address any issues and facilitate the smooth release of the film. This decision marks a pivotal moment in the realm of Tamil cinema and the entertainment industry at large.

Historical Context:

The Indian film industry, particularly the Tamil film industry, has seen its share of controversies and challenges related to film releases. Issues such as censorship, political disputes, and public sentiment have often played a significant role in shaping the release schedules and screening times for films. Vijay, one of Tamil cinema’s most prominent actors, has been at the center of such controversies in the past. This decision by the Madras High Court is, therefore, particularly noteworthy.

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The Ruling:

The Madras High Court’s decision to permit early screenings of “Leo” comes as a response to a plea filed by the film’s producers. The court, while considering the plea, took into account various factors, including the film’s anticipated popularity and the prevailing circumstances. The court emphasized the importance of accommodating the audience’s interests and allowing them to enjoy the film without disruptions.

A Step Towards Normalization:

The court’s decision signifies a positive shift in the film industry, where release dates and screening times are often mired in controversy. By allowing screenings to commence at 7 AM, the court aims to reduce the chances of public unrest and congestion near theaters, especially in the wake of high-profile film releases.

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The Role of the Tamil Nadu Government:

The Madras High Court, in its ruling, also called upon the Tamil Nadu government to cooperate in ensuring a seamless release for the film. This cooperation extends to providing necessary security measures to maintain law and order around theaters during the early screenings.

Implications for the Entertainment Industry:

The decision is expected to set a precedent for the release of other highly anticipated films, not just in Tamil cinema but also in the broader Indian film industry. The court’s emphasis on the importance of accommodating the audience’s interests could lead to more flexible screening times for movies in the future.

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The Audience’s Perspective:

For moviegoers and fans of Vijay, this decision comes as a welcome relief. They can now look forward to enjoying the film without any undue delays or disruptions, ensuring a memorable cinematic experience.

In conclusion, the Madras High Court’s ruling to allow early screenings of Vijay’s “Leo” at 7 AM while urging the Tamil Nadu government to resolve any issues paves the way for a more audience-centric approach in the film industry. It is a landmark decision that highlights the importance of balancing the interests of filmmakers and the movie-loving public. This judgment is poised to make a positive impact on the release of future films, ushering in a new era of flexibility and convenience for cinema enthusiasts.

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