FM to RBI: more bank licences, please | india | Hindustan Times
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FM to RBI: more bank licences, please

Finance minister P Chidambaram is set to nudge the Reserve Bank of India to come out with the final guidelines on new banking licences at the earliest, Mahua Venkatesh reports.

india Updated: Sep 21, 2012 00:40 IST
Mahua Venkatesh
Mahua Venkatesh

Finance minister P Chidambaram is set to nudge the Reserve Bank of India (RBI) to come out with the final guidelines on new banking licences at the earliest.

The UPA II is keen to walk the talk on allowing several new private entities enter the banking space while propping up an image of being investor friendly amid uncertainties pertaining to other reform measures.

President Pranab Mukherjee, who was finance minister in 2010, announced, while delivering his budget speech that the RBI would grant fresh banking licences to the private sector to service the growing market.

The RBI came up with draft guidelines on the same in August last year.

“Final guidelines will be issued and the process of inviting applications for setting up of new banks in the private sector will be initiated after receiving feedback and suggestions on the draft guidelines, and after certain vital amendments to Banking Regulation Act, 1949 are in place,” the RBI said in a statement.

“The government is keen to give fresh licences to a few private entities as was announced in Budget 2010 and effort has to be made to give licences even if the Banking Regulation Act cannot be amended,” a senior government official said.

A senior RBI official told HT that framing the guidelines is taking more time than expected due to the extensive nature of the suggestions received by the central bank. “We need to study every minute details before finalising the guidelines,” the official said.