Arab Today, arab today india ready to open up formal banking
Last Updated : GMT 17:09:37
Arab Today, arab today
Arab Today, arab today

India ready to open up formal banking

Arab Today, arab today

Arab Today, arab today India ready to open up formal banking

New Delhi - Arabstoday

In an ambitious effort to promote financial inclusion in a nation where only three in 10 people have access to formal banking, the Indian government is gearing up to unveil draft rules to issue licences to private-sector companies that would enable them to set up banks in India.Large corporations, including Tata, Mahindra, Bajaj and the Ambani group led by the billionaire tycoon Anil Dhirubhai Ambani, are hankering after these licences, eager to penetrate India\'s tightly regulated but highly profitable banking sector.It is poised to become the world\'s third-largest in terms of assets over the next 14 years, according to the Boston Consultancy Group. Assets of the domestic banking industry are poised to touch US$28.5 trillion (Dh104.68tn) by 2025, from $1.35tn last year.India has 26 state-run banks, 22 private lenders and 32 foreign banks, but it remains a vastly underpenetrated market compared with most developed economies, providing scope for explosive growth.The management consultancy McKinsey says there are only 10.11 bank branches per 1,000 adultsand barely one-third of India\'s 1.2 billion people have bank accounts. Of India\'s 600,000 villages, only 30,000 have access to bank branches.As rural incomes expand, there is a greater demand for banking services. According to the market research company India Brand Equity Foundation, the country\'s working population is expected to increase from 675.9 million to 795.5 million by 2026, expanding the market for banks. The government expects that large corporations will bring with them business and managerial competence to raise capital, which could further boost the sector.But the decision to allow private corporations to own banks is fraught with risks, observers warn. Duvvuri Subbarao, the chief of the Reserve Bank of India, this week warned that the government needed to plug several policy \"gaps\" before the draft rules were finalised. The biggest concern is that corporations could use banks as private cash pools for \"self-funding\", a pernicious practice that may be hard to detect, as lending to promoters or group companies could be disguised by complex company laws.But corporations say India\'s Banking Regulation Act, a 1949 legislation that regulates the sector, has inbuilt statutory checks to curb self-funding.The act prohibits banks from lending to directors on the board of a bank or to relatives of directors without the prior approval of the board. But Mr Subbarao warns of a loophole in the law.\"If a businessman has an interest in a bank as a promoter or a shareholder but has no position on the board, then there is no prohibition on the bank lending to the businessman,\" he said. \"This opens up opportunities for self-dealing. As we contemplate allowing corporates to promote banks, there is need for changes in statutes and regulations to address such concerns.\" But he declined to say when the licences would finally be issued.Many analysts are critical of the government policymakers for heavy banking regulations that restrict growth.But the government says its cautious and calibrated approach kept the sector largely insulated from the global economic crisis in 2008, when many banks in US and Europe went bankrupt. While their western counterparts tightened monetary policy, India\'s banks were lending, functioning as a significant driver of GDP growth and employment during the crisis. \"The banks in India not just survived the crisis, but also grew at an excellent rate,\" Palaniappan Chidambaram, the finance minister during the crisis, said last year. Twenty Indian banks with a total brand value of $13 billion were listed on last year\'s Global Banking 500, the annual international ranking of the world\'s most valuable brands by the UK consultancy Brand Finance.The government-owned State Bank of India, the country\'s largest bank - whose brand value increased from $1.5bn in 2009 to $4.55bn last year - was ranked 36 and became the first Indian lender to be ranked among the top 50 banks in the world.In a report released this month, Fitch Ratings said Indian banks, which have higher capital and improved loan-loss reserves, are better equipped now than 2008 to weather a global economic slowdown amid renewed concerns of a double-dip recession. From / The National

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today india ready to open up formal banking Arab Today, arab today india ready to open up formal banking

 



Arab Today, arab today
Arab Today, arab today Prepares to present her new collection

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 21:49 2017 Thursday ,16 February

Scientists develop new therapy

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday