New banking licences might get delayed further: Report

Posted By: Religare
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New banking licences might get delayed further: Report
Even as the government managed to get the Banking Amendment Bill passed in parliament, the issue of new banking licences seems to be far yet amid conflicting views of various policymakers over allowing real estate and brokerage firms into the sector.

Media reports said that RBI has been delaying the issue of final guidelines after finance ministry came up with a suggestion that real estate and brokerage companies be considered eligible for setting up banks.

Moreover, RBI has also been rethinking about its guidelines as International Monetary Fund recently said that industrial houses should not be allowed in banking.

Among many such advisors to the central bank on guidelines, Nobel laureate Joseph Stiglitz had also advised against giving industrial houses licences to set up new banks. In line, Prime Minister's Economic Advisory Council Chairman C Rangarajan had said preference should be given to non-corporate sectors.

The central bank, in its draft guidelines, had been open to the idea of allowing corporate sector into banking space but the suggestions from above mentioned economists have forced it to rethink, causing delay in release of final guidelines.

Read more about: banks, rbi
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