NBFCs want 10 years to cut promoter stake in new banks

MUMBAI: The Finance Industry Development Council (FIDC), a representative body of non-bank finance companies, on Thursday suggested the central bank, when awarding new banking licences, should give promoters 10 years to cut stake to prescribed 10 percent levels.

The present Reserve Bank of India guidelines stipulate that a promoter has to bring in a minimum of 40 percent of capital with a lock-in clause for five years and over time reduce it to 10 percent. There is no set timeframe for promoters' stake dilution, and the RBI gives a deadline on case-to-case basis.

"Between 26 to 40 percent...(to be cut) in a phased manner over 10 years," Mahesh Thakkar, director general of FIDC, said, when asked about the council's proposals on promoter holding to RBI.

RBI deputy governor Usha Thorat on Thursday called a meeting of potential banking licence applicants, seeking feedback and clarification on the discussion paper that it released in August.