New Banking System: New banks will open in the country soon! NBFCs will become banks, know why the government is making this change

New Banks in India: Currently, if we talk about the private sector in the country, HDFC is the biggest bank and in the public sector, SBI is the biggest bank. It is being told that the government is planning to give approval for some more new banks in the coming time.

Govt Banking System: Many private and government banks are working in the country. But now the day is not far when you will see some more private banks working in the country. In this sequence, along with giving some new approvals, some NBFCs can also be given the status of banks. Yes, all this is a part of the government’s big planning. Actually, Prime Minister Modi has set a target of making India a developed nation by 2047. For this, bank funding needs to be increased from 56% of GDP to 130%. Now the government is planning to start new banks in the country after about 10 years.

Ideas on creating bigger, stronger and more banks

Bloomberg’s report claims that discussions are going on between the officials of the Finance Ministry and the Reserve Bank of India (RBI) to advance the country’s banking sector. Its purpose is to support the country’s economic growth for a long time. According to the report, the government and RBI are considering several plans so that bigger, stronger and more banks can be created. These will support the country’s economic growth. The discussion is still in its initial stages and no final decision has been taken regarding this.

Plan to give banking license to big companies

The report also claimed that the officials are also considering giving banking license to big companies. For this, there may be some restrictions on shareholding. According to the government’s plan, NBFCs can be encouraged to be given the status of banks. Apart from this, there is also a plan to simplify the process of increasing stake in government banks for foreign investors. There has been no official statement from the Finance Ministry and RBI on this.

Banking licenses were last issued in 2014

During the trading session closed on Friday, the Nifty PSU Bank Index (tracks government banks) closed with a gain of 0.5% after an initial decline of 0.8%. This year this index has increased by 8%. Let us tell you that the last time new banking licenses were issued by the government was in 2014. In the year 2016, large industrial and business groups were barred from taking banking licenses. Now this policy can be reconsidered.

There is also a plan to create big banks by merging small banks

According to the report, small banks will be merged to form big banks There is also a plan to create big banks. In South India, where companies like Apple are increasing manufacturing, some NBFCs may be encouraged to take full banking licenses. According to Bloomberg data, only two Indian banks are among the top 100 banks in the world, State Bank of India (SBI) and HDFC Bank. At the same time, banks from China and America dominate the top 10.

Target to make the country a developed economy by 2047

Actually, India’s banking sector has the strictest rules in the world. The limit of foreign investment in government banks is 20%. Government approval is necessary for this. Increasing this limit can be considered, but the government wants to keep its major share in government banks. Prime Minister Modi has set a target to make the country a developed economy by 2047. For this, bank funding needs to be increased from 56% of GDP to 130%.

In the month of May, RBI Governor Sanjay Malhotra told TOI had told that RBI is reviewing its licensing framework. Its purpose is to meet the changing needs of the economy. He said that it is necessary to create strong and reliable banks. Foreign interest in the Indian banking sector is increasing. In May, Japan’s Sumitomo Mitsui Financial Group invested Rs 13,500 crore for a 20% stake in Yes Bank. This is the largest foreign investment in the banking sector so far.

The post New Banking System: New banks will open in the country soon! NBFCs will become banks, know why the government is making this change first appeared on informalnewz.

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