On-tap bank licence

Q.  Which of the following is/are true about On-tap bank licence?

1) Large industrial houses, whose income from non-banking sources is over 40 per cent of total, will be eligible to set up a universal bank in the country.
2) Existing non-banking financial companies (NBFCs) that are controlled by residents and have a successful track record for at least 10 years will be eligible.
- Published on 03 Aug 16

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

ANSWER: Only 2
 
  • Large industrial houses, whose income from non-banking sources is over 40 per cent of total, will not be eligible to set up a universal bank in the country.
  • However, they are allowed to pick up 10 per cent stake in banks.
  • In the final guidelines on on-tap licensing, the central bank has allowed individuals with 10 years of experience in banking and finance, as well as business groups with 10 years’ track record to promote universal banks.

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