RBI toughens entry norms for private banks
Mumbai: In a significant move, the Reserve Bank of India has barred the corporates from either setting up banks or converting their non-banking finance companies into banks. However, they have been allowed to hold up to 10 per cent equity in a new bank.

In its revised guidelines for the entry of new private-sector banks and conversion of non-bank finance companies (NBFCs) into banks, the central bank has said that the new lot of private banks must have an initial minimum paid-up capital of Rs 200 crore.

The promoters' contribution has shall be a minimum of 40 per cent of the paid-up capital of the bank at any point of time. However, in case the promoters' contribution to the initial capital is in excess of the minimum proportion of 40 per cent, they shall dilute their excess stake after one year of the bank's operations.

The RBI has also stated that the number of licenses to be issued over the next three years may be restricted to two or three of the best acceptable proposals, including conversion of NBFCs into bank.
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Sebi asks stock exchanges to keep tabs on corporate governance moves
Mumbai: The Securities and Exchange Board of India (Sebi) has decided to direct the stock exchanges to set up cells for monitoring of the "A" group companies for compliance with the Kumar Mangalam Birla committee recommendations on corporate governance. The regulator has set April 1, 2001, as the deadline for companies to fall in line with the committee recommendations.

The issue is likely to be discussed threadbare at a meeting of all stock exchanges convened by the Sebi on January 17. The meeting would also discuss the modalities of how the cells would monitor the issue of corporate governance initiative by companies.

Among one of the key committee recommendations is with respect to accounting standards to be by the Indian companies. Two accounting standards have already been issued by the Institute of Chartered Accountants of India (ICAI), pertaining to segment-wise reporting and related party transactions. The implementation of this is to be now ensured by the auditors. Besides, three other crucial disclosures - on consolidation of accounts with subsidiaries, deferred tax liability and earnings per share (EPS) - would also be made mandatory for the companies.
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