| Date : 27 Aug 2007 |
|RBI Discussion Paper on Holding Companies in Banking Groups |
Bank of India today placed on its website discussion
paper on holding companies in banking groups for comments from the public.
Comments may be sent within three weeks to Chief General Manager-in-Charge, Department
of Banking Operations and Development, Reserve Bank of India, Central Office ,
Shahid Bhagat Singh Marg,
Mumbai - 400 001 or may be
may be noted that in many countries, deregulation and financial consolidation
have led to the development of Financial Holding Companies-allowing commercial
banking, insurance, investment banking and other financial activities to be conducted
under the same corporate umbrella. There are several ways of conducting different
financial services in the same organisation using different conglomerate models,
viz., the Universal Bank, the Bank Subsidiary Model and the
Bank Holding Company model.
financial services sector in India has been witnessing a growth in the emergence
of financial conglomerates. With the enlargement in the scope of the financial
activities driven by the need for diversification of business lines to control
the enterprise-wide risk, some of the players are experimenting with structures
so far unfamiliar in India. In this context, it is considered opportune to take
a review of some of the conglomerate structures and assess their suitability for
the country given the prevailing legal, regulatory and accounting framework and
highlight the regulatory and supervisory concerns emanating from such structures.
The Reserve Bank of India has prepared the discussion paper on holding companies
in banking groups in this context. The Reserve Bank would take a policy view in
the matter based on the comments received.
Chief General Manager