Synopsis
These proposed regulations aim to ringfence the banks’ core business from other risk bearing non-core businesses and provide operational freedom for making investments. These changes have been on the anvil for some time and follow a raft of regulatory measures on the banking system such as the proposed LCR norms, project financing norms, etc. The proposed regulations on no overlap in the lending activities and restrictions on investments may require certain banks, which have subsidiaries that are NBFCs/HFCs, to re-align their structures.
