1. Implication of New Banking Licence
on Indian Financial System
Presented By:
Ankit Khandelwal (13MFC021)

2. Birth of RBI
• By early 30s, there were >1200 banks in India
• All of them under Companies law
• Problem starts with Great American depression
(’29)
• British Indian government setups Reserve bank
of India

3. Nationalisation
Year How many? who?
’55 1 Imperial bank (SBI)
’69 14 banks with >50 cr. deposits.
’80 6
banks with >200 cr. deposits (Andra, Vijaya, Oriental bank
of commerce etc.)

4. The Broad Perspective
• 1st Round (1993)
▫ RBI invites application
▫ New private banks start Operation
▫ Total ten private banks given licences
• 2nd Round (2001)
▫ Applications invited
▫ Winners launch bank

5. Commercial Banks
17%
13%
27%
41%
2%
Public Sector Banks
Private Sector Banks
Foreign Banks
RRB
Local Area Banks

6. Need for More Bank?
• The World Bank Report
• 35% of Indian adults have access to bank accounts
• Only 2% used it to receive money from family
members
• Out of 6 lakh rural habitation in the country, only
40,000 had been covered by branches of the banks
• As of 2009, India has only 6.33 branches per
1,00,000 person

7. The Genesis
The Union Finance Minister, in his Budget Speech for the
year 2010-11 had stated,
• Banking system grows in size
• Needs of a modern economy
• Extend the geographic coverage of banks
• Considering giving some additional banking licences
• If they meet the RBI’s eligibility

8. New Banking License Guidelines
• Eligible Promoters
• ‘Fit and Proper’ Criteria
• Corporate structure of the NOFHC
• Minimum voting equity capital requirements for banks
and shareholding by NOFHC
• Regulatory framework
• Foreign shareholding in the bank

9. Continued
• Corporate governance of NOFHC
• Exposure norms
• Financial Inclusion
• Business Plan for the bank
• Other conditions for the bank
• NBFC’s

10. Implications of New Banking License
• Implications for the promoters
• Implications for the Banking Industry
• Implications for the Economy
• Implications for the Common Man
• Implications for the Reserve Bank

11. Procedure for RBI Decision
• Screening of applicants
• Submission of Recommendation
• In-principle approval
• Name of applicants to be placed on RBI website

13. Bandhan Microfinance
IDFC (Infrastructure Development and Financial
Corporation)
West Bengal Mumbai
Micro-finance company infrastructure finance company
Chandra Shekhar Ghosh Rajiv Lall
net worth 1100 Cr., 45% branches in rural areas net worth 21000 cr., but rural presence low

14. IDFC
• IDFC was created in 1997 to fund long-term infrastructure
projects
• Here are some financial highlights for the financial year
2012-2013:
- Balance sheet size: Rs 71,059 crore
- Total income: Rs 8, 148 crore
- Total loans: Rs 56, 595 crore
- Net profit: Rs 1, 836 crore
- Return on equity: 14 percent
- CAR: 22.1 percent
• IDFC has 10 direct subsidiary companies including IDFC
Securities Ltd, IDFC Asset Management Company and IDFC
Primary Dealership

15. Bandhan
• Bandhan was started in the year 2001
• Work with women
• Wide Reach
• The Winning Formula
• SWOT
• Monthly Status as on August 2014
• States & Union Territories- 22
• Branches - 2,016
• Borrowers - 58,16,529
• Staff - 13,319
• Loan disbursed for the month - 1004 crores
• Loan outstanding - 6,446 crores

16. Conclusion