Also, nearly all the experts were of the view that the present prescription of listing within six years from commencement of operations, for universal bank in the "on-tap" licensing guidelines can be followed uniformly including small finance banks, which had been given only three years from reaching networth of Rs 500 crore, the report noted.
There is also a provision in the recommendations to facilitate payment banks to become small finance banks.
Payment Banks are entities that can accept deposits, offer savings and current bank accounts and also issue debit cards.
An internal working group of the Reserve Bank of India (RBI) has proposed the entry of corporate houses into banking and higher promoter stakes in the long run.
The universe of India's NBFCs including 9,601 companies of which top 50 account for 80 percent of the market share of loans.More news: James hopes to build on his worldie for Wales
The IWG report is placed on the RBI website on Friday for comments of stakeholders and members of the public.
As on March 31, 2020, the asset size of India's NBFC sector, including housing finance companies, stood at 688 billion USA dollars.
The panel has also recommended hiking the cap for promoter stake from 15 percent to 26 percent in the long-run.
"Large corporate/industrial houses may be allowed as promoters of banks only after necessary amendments to the Banking Regulation Act, 1949", the committee suggested.
"This stipulation should be uniform for all types of promoters and would mean that promoters, who have already diluted their holdings to below 26 per cent, will be permitted to raise it to 26 per cent of the paid-up voting equity share capital of the bank", it said. IWG said that a track record of three years of experience as payments banks may be considered sufficient.More news: Georgia Governor certifies Joe Biden’s win in State
The panel also suggested that a non-operative financial holding company (NOFHC) structure should continue as the preferred route for all new banking licences.
Banks now under NOFHC structure may be allowed to exit from such a structure if they do not have other group entities in their fold.
"Once the NOFHC structure attains a tax-neutral status, all banks licensed before 2013 shall move to the NOFHC structure within 5 years from the announcement of tax-neutrality", RBI statement said.
The group also suggested that the RBI take steps to ensure harmonisation and uniformity in different licensing guidelines, to the extent possible. Existing banks should benefit from the new licensing guidelines if the new rules are more relaxed. A committee of the Reserve Bank (Bank) has suggested to change the banking law and offer banking license to the Industrial House.
Some of its other recommendations include doubling the minimum initial capital requirement for new universal banks to Rs 1,000 crore and small finance banks to Rs 300 crore from Rs 200 crore.More news: Bigg Boss 14: Rubina Dilaik, Abhinav Shukla argue over captaincy task
Capital has not been a problem for private banks. RBI will examine the comments and suggestions before taking a view in the matter.