Old small private sector banks gained on Monday on hope the
Reserve Bank of India (RBI) guidelines on new banking licenses may
trigger merger and acquisition in the banking space.
Entities in the private and public sector and NBFCs will be
eligible to set up a bank through a wholly-owned Non-Operative
Financial Holding Company (NOFHC), the RBI said. The initial
minimum paid-up voting equity capital for a bank shall be Rs 5
billion.
"The move is likely to be positive for old private banks from an
acquisition perspective and also for those NBFC's that are into
priority sector lending, as new players are likely to initially
rely on them for meeting targets," said Dinesh Thakkar, chairman
& managing director, Angel Broking.
Lakshmi Vilas Bank climbed the most with rise of 2.54%, followed
by City Union Bank (1.43%) and South Indian Bank (1.40%).
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