RBI may issue bank licences in phases | business | Hindustan Times
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RBI may issue bank licences in phases

The Reserve Bank of India (RBI) is likely to give out the much-awaited bank licenses in a phased manner, with public sector or quasi public sector enterprises getting the nod within January next year.

business Updated: Nov 21, 2013 02:33 IST
Mahua Venkatesh

The Reserve Bank of India (RBI) is likely to give out the much-awaited bank licenses in a phased manner, with public sector or quasi public sector enterprises getting the nod within January next year, given the fact that their track records are open and in public domain. This would mean a relatively less stringent due diligence process, a source familiar with the development said on the condition of anonymity.

RBI may issue the rest of the licenses by the middle of next year.

Earlier, RBI governor Raghuram Rajan had said that new banking licences will be given by January, 2013.

Insiders, however, said that time is limited for the central bank to do a through due diligence of all applicants. “Therefore there is a possibility that a few licences come in January and others later,” sources said. India Post, IFCI, Tourism Finance Corporation are among the public sector units that have applied for licences.

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As many as 26 companies have applied for new licences. Companies wishing to set up banks placed in their application by July 1.

Aditya Birla Nuvo, Muthoot Finance, L&T Finance, Religare Enterprises, India Infoline, Reliance Capital, Edelweiss Financial, and SREI Infrastructure Finance are among those that have already applied for licences.

The central bank had asked for feedback from companies that have applied for licences. A high-level advisory committee, under former RBI governor Bimal Jalan has already been set up, to screen and assess the applications received by the central bank and find out which companies are ‘fit and proper’.

President Pranab Mukherjee, who was finance minister in 2010-11, announced in his budget speech that new banks would be required to increase banking network in the country. At present, over 40% of Indians have no access to banking services.