The new banks—wholesale and long-term finance banks—will focus on lending long-term and cater to the funding needs of sectors such as infrastructure and core industries, RBI said in a discussion paper. Photo: ReutersMumbai: The Reserve Bank of India (RBI) on Friday released a discussion paper seeking comments on a new category of banks—wholesale and long-term finance banks that will fund large projects. According to the discussion paper, these wholesale and long-term finance banks will focus primarily on lending to the infrastructure sector and small, medium and corporate businesses. Since wholesale and long-term finance banks will not acquire savings deposits, they will focus on corporate bonds, credit derivatives, warehouse receipts and take-out financing, as sources of funds, the paper said. For universal banks, the minimum equity capital stands at Rs500 crore while for differentiated banks such as payments banks and small finance banks, it is Rs100 crore.

Source: Mint April 07, 2017 13:54 UTC