RBI proposes wholesale & long-term finance banks
RBI proposes wholesale & long-term finance banks
The Reserve Bank of India (RBI) on Friday proposed
to float wholesale and long-term finance (WLTF) banks that
would fund long-term high-value projects - something similar to the development finance institutions
(DFIs) of the past.
"Going forward, considering the existing landscape of
banking and non-banking services in the country, it is felt that there is a
need to explore the possibilities of permitting other types of differentiated banks to
facilitate progression to a more mature and deeper financial sector," the
central bank said in a draft discussion paper on WLTF banks.
The minimum capital required for the bank would be Rs 1,000
crore, considering these banks would be "very large institutions ab
initio to take on large exposure to industrial, commercial and infrastructure
sector". Therefore, they have to heavily invest in information technology and
skill building to mitigate the risks.
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