"Before issuing licenses to new entities to set up banks, the central bank would be required to study and examine very carefully each and every application and this could take at least six months," a senior government official who refused to be identified told Hindustan Times.
The central bank is also in the process of appointing a committee to study the applications. "The committee would be set up before July," the official added.
RBI had last issued bank licenses 10 years ago. Yes Bank and Kotak Mahindra Bank got banking licenses in 2003-04.
Several corporate houses, including big names such as Larsen & Toubro, Aditya Birla Group, Reliance ADA Group, Religare and state-owned Power Finance Corporation (PFC) among others have already indicated that they would apply for new banking licences. The entry of new faces would change the contours of the banking industry and induce more competition in the sector.
As per the RBI guidelines, the minimum paid-up capital required for setting up a bank would be R500 crore while the cap on the foreign investment, including foreign direct investment and foreign institutional investor, has been fixed at 49%.