Small private sector banks gain on new license norms
25th February 2013 11:18 AM
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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