The Reserve Bank of India (RBI) on Tuesday said it will issue final guidelines for on-tap universal banking licences before the end of 2014-15.
“We are working towards issuing guidelines for full service banks on-tap… I cannot give you a timeline, but it will be in this financial year,” R Gandhi, deputy governor, RBI said on the sidelines of a banking event organised jointly by Indian Banks Association and Ficci in Mumbai.
Gandhi also said that based on PJ Nayak Committee recommendations, the posts of chairman and managing director in public sector banks would be segregated, while having a separate committee for appointment of directors to the boards of these banks. “They are taking up the final decision (for consideration),” Gandhi said.
On-tap licensing essentially means that companies wishing to open full service banks can apply to the central bank at any time. At present, such companies are only given a limited period window to apply for banking licences.
Last year, the central bank had granted preliminary banking licences to IDFC Ltd and Bandhan Financial Services Pvt Ltd. Before this, the central bank had issued bank licences in 2003-04, when Yes Bank and Kotak Mahindra Bank got banking licences.
RBI has already issued draft guidelines for payment banks and small banks as part of the differential banking model that exists in developed economies such as the US, Australia, and Singapore. Such banks do not need to provide full services and can offer specialised services in their operations.
“Now the public comments (on small and payment banks) have been received and we are factoring in them. Soon we will come out with the final guidelines on these two,” Gandhi said.
RBI has given licences to only 12 banks in the private sector in the last two decades.