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Final guidelines for new banking licences soon: RBI Dep Gov

By Religare
Final guidelines for new banking licences soon: RBI Dep Gov
Deputy Governor of Reserve bank of India (RBI), Anand Sinha has said that it will come out with the final guidelines for new bank licences much before the end of the fiscal as its consultation process with the Finance Ministry is over.

Speaking to the reporters, Sinha said, "We are in the process of issuing the licence guidelines. We should issue them soon...The consultation process with the Finance Ministry is over; everything is settled now, and we will be issuing the guidelines. (It will be) much before the end of this financial year."

Speaking on Chidambaram comments on allowing corporate into banking sector, Sinha said, "I cannot go beyond the draft guidelines because what will be in the final norms, we can't reveal. In the draft guidelines, we have certainly made corporates eligible."

"We have said clearly in our draft guidelines (that) it will be a selective process naturally, because banks are very important for the financial sector and people have to meet all the criteria ... We don't put a number around that, that will depend on the quality of applications. (It is) very difficult to say anything more at this stage," Sinha said.

The central bank had issued draft guidelines in August 2011 which had said firms with an exposure of 10 per cent or more to real estate and brokerage businesses by revenue or assets would not be eligible for applying for licence.

"Once the final guidelines are out, whosoever is eligible will be given time to apply. Then there will be internal evaluation of the applications. We have also said very clearly in our draft guidelines that there will be an external committee which will evaluate the applications. After all these processes, we will give an in-principle licence and we will give them a year to set up banks," he said.

Read more about: bank license
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