Initial infusion of Rs 400 crore & management rejig proposed.
Based on the 36-currency REER on a trade weights basis, the Indian currency is overvalued 16.39% in February 2017, higher than the 9.90% overvaluation a year ago.
These banks will be exempted from opening branches in rural and semi-urban areas and will not be forced to lend to agriculture and weaker sections of the society.
Eligibility of promoters for these so-called Wholesale and Long Term Finance Banks (WLTFB) will be the same as for the 'on tap' universal banking licence.
Higher capital requirement means that some smaller ARCs may not be able to raise the required capital & will have to either close or merge with larger ones.
81% of the households surveyed by the central bank expect prices to increase, up from 68% when the last survey was done in December 2016.
RBI said that the enhanced capital requirements were necessary because of the higher amount of cash required to buy bad loans from the current fiscal.
The new code provides for professional management to take over the company to help revive it, which in turn will create value for the lenders who control the company.
Crisil expects inflation to average 5% in the fiscal year ended March 2018 higher than the 4.7% estimate for the fiscal ended March 2017, mainly as both food and non- food prices will be elevated.
"Discussions started way back in January 2016 so it was a full 11 months of preparations. If somebody says 11 months are insufficient, I cannot say anything."
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