The Road to BaNKING Reforms (2)

8/8/2019 The Road to BaNKING Reforms (2)

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The RBI issued 10 new bank licenses.

AT PRESENT.Of the lot,

4 institutions and 1 non-resident backed bankhave survived..

4 mergedwhile 1 more is still finding its feet.


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HDFC BANK

UTI BANK

ICICI BANK

IDBI BANK

IndusInd BANK

TIMESBANK

GLOBAL TRUST BANK

CENTURIAN BANK

BANK OF PUNJAB DEVELOPMENT CREDIT BANK


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HDFC Bank is presently the most merged bank in the country,and fights giants such as SBI and ICICI bank in the boomingretail sector.

ICICI Bank and IDBI bank remerged themselves with their

parents. UTI bank has rebranded itself as AXIS Bank.

DEVELOPMENT CREDIT Bank had upgraded itself from a co-operative bank, but still finding its feet.

IndusInd Bank, which is backed by the powerful Hinduja Clan,

has also survived although not like the other survivors.


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Promoted by Bennett, Coleman & Co,TIMESBANK was the first to call itquits.

It started its operations in 1995,underN.G.Pillai.

Pillai quit in 1998, and was replacedby Nani Jhaveri from ANZ Grindlaysin Melbourne.

The bank was sold to HDFC Bank in2000.

Set up by Ramesh Gelli, JayantMathab and Sridhar Subasri.

It was the most private bank when itstarted out.

This, and its bourse flirtation, proved

costly.

In the late 2004, the RBI put it undermoratorium.

It was forced merge with Orientelbank of Commerce later.


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Promoted by Dev Ahujas 20th

Century Finance, and SingaporesKeppel Grou, it started life in June1994.

In April, 2003 Rana Talwar walked inas a white knight.he put the bank oncourse.

But later on in June 2005, it merged

with Bank of Punjab.

Was set up in 1995 under thestewardship of Inderjit Singh, formerChairman of Punjab & Sindh Bank.

In 2007, HDFC Bank saw it as a target

to tap the North India, and gobbled itup.


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This time the central bank played safe;

Issued only two licenses.

Rana Kapoor of Yes Bank

Uday Kotak of Kotak Mahindra Capital

bagged them

At that time, Corporates were kept out.


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Rana Kapoors YES BANKRana Kapoors YES BANK has been recognizedamongst the Top and the Fastest Growing Bank invarious Indian Banking League Tables byprestigious media houses and Global AdvisoryFirms, and has received national and international

honours.

Uday Kotaks Kotak Mahindra Finance Ltd.Uday Kotaks Kotak Mahindra Finance Ltd. isthe first non-banking finance company inIndia to convert itself in to a bank as KotakKotak

Mahindra Bank Ltd.Mahindra Bank Ltd.Today its one of the fastest growing bank andamong the most admired financial institutionsin India.


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Change in the licensing norms


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A discussion paper by the RBI on fresh banklicenses depth-charges the issues.

And also paved the way ahead for new private

banks. It sets the ball rolling on new criteria.


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RBI has proposed that the capital requirement should be in therange of existing Rs 300 to 1000 Crore.

On the shareholding pattern, RBI proposes that the promotersshare should decrease on increasing equity base.

This model will ensure that the banks get support of promotersin the initial years and after it grows to a size, it is run on a

professional model.


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Bigger, Better, Faster and More..


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TATA GROUPTata Capital is groupsfinancial arm. It holdsabout 4% in DevelopmentCredit Bank .

The Tatas did run a Bankin the past, Central Bankof India.

Ratan Tata have been on

the RBIs Central Board ofDirectors.

Ratan Tata


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RADAGRADAG(RELIANCE Anil(RELIANCE Anil

DhirubhaiDhirubhaiAmbaniAmbani GroupGroup))

RELIANCE Capital has

many financial services;Banking license is anatural progression.

Anil Ambani was termeda financial whizkid duringthe joint-family days.


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ReligareReligare

GroupGroup

Religare Capitalrepresents Singh

Brothers thrust intofinancial services.

Have enough capital torun a bank.

Malvinder Singh


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BIRLA GROUPBIRLA GROUP

Could enter bankingthorough BirlaFinancial Services bymaking it a separate

entity.

It could easily becomea full-fledged bank.

K.M.Birla also havebeen on the RBIsCentral Board ofDirectors.

Kumar Mangalam Birla


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EDELWEISSEDELWEISS

The face to watch outfor. Shah has a stint atICICI.

Seen as Uday Kotakversion 2.

Strong background in

capital markets andallied business.

Rashesh Shah


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Future Group

IndiaBulls

Rabo India

IFCI

The Muthoot Group

Sahara India Pariwar

Vishwavir Ahuja


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PROS-

Big companies will brought in the huge capital.

These groups have proved their mettle as NBFC.

CONS-

Possibility of Diversion of funds.

May not be seriously committed to financialinclusion.

A prolonged business slump may threaten thestability of the banks.


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Journal- Businessworld, 6 Sep Edition, 2010,page no. 36

www.businessworld.in

www.yesbank.in/About us

www.kotak.in/bank/about us

www.thehindu.in

Documents

The Road to BaNKING Reforms (2)