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RBI may raise net worth for new banks
June, 25th 2010

The Reserve Bank of India (RBI) is likely to insist that non-banking financial companies (NBFCs) that want to become a bank have a net worth (equity and free reserves) of at least Rs 1,000 crore. This is one of the many changes the central bank is planning to make in licensing norms for the new set of banks that may be allowed to open for business in the next two years or so. In the early 1990s, when RBI allowed the first set of new private banks to start business, they were required to have a net worth of Rs100 crore. Earlier this decade, when RBI allowed two more banks to come into being, the amount was raised to Rs300 crore.

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