P R E S E N T E D BY
1.
A B H I L A S H G U P TA
2.
NITIN AWASTHI
3.
KUMAR VIVEK
3. TO EXTEND THE
GEOGRAPHIC COVERAGE OF
BANKS AND IMPROVE
ACCESS TO BANKING
SERVICES TO MAJORITY OF
PEOPLE IN THE COUNTRY
2. TO INCREASE PRESENCE OF
BANKING SYSTEM IN THE
RURAL ARES
THE NEED
CRITICAL CONSIDERATION
1. Setting up NOFHC with the appropriate shareholding and governance
structure that will meet RBI requirements. Strong pedigree of the top
management and independent directors
2. Tax implications (direct, indirect, stamp duty) and other considerations
(existing JVs etc.) on transferring of financial services business under
NOFHC
3. Relatively stringent capital adequacy requirement of 13% for 3 years as
well as compulsory opening of 25% branches in unbanked rural centers
may strain the viability and render them uncompetitive against
established players who do not have such restrictions.
4. Establishing a successful track record and profitability within 3 years, in
order to get appropriate valuation at the time of compulsory public
listing
5. Prohibition of opening a new financial services entity by NOFHC for the
first 3 years can result into a disadvantage in the near term for players
who wish to have a wider financial services footprint
6. Existing NBFCs may wish clarification on the conversion of its existing
Tier 1 center branches, as the guidelines have proposed RBI approval
for such branch conversion