No new banking licences without legal backing, says Subbarao
Nov 16 2012 , Pune
"We have been preparing for launching this process (of issuing new bank licences) but all the ground work, all the enabling conditions for launching this work have to be fulfilled," he told reporters on the sidelines of a function here.
Yesterday, Chidambaram had said he had asked RBI to finalise the guidelines for new bank licences and start accepting applications for the same pending passage of the Banking Laws (Amendment) Bill.
"We have written to RBI recently urging them to proceed to finalise the guidelines and proceed to receive applications for new banking licences in anticipation of the amendment in the Banking Regulation Act," the Finance Minister had said.
"We hope that RBI will pick up the thread and finalise the guidelines and start receiving the application."
The Minister had said that "the power or the authority" which RBI wants is already available in the other provisions of the law and with the central bank's own regulations and guidelines for new banking licences.
The last time RBI allowed new private banks was in 2002, prior to which it allowed new players in the mid-90s.
The RBI issued the final guidelines in August 2011 for entry of new banks, including those floated by corporates, but is waiting for the necessary legal powers before it proceeds further. The bank licences were initially slated to be issued way back in 2008-09.
The Governor was talking to reporters in Pune after inaugurating an RBI conference on 'Leveraging Cooperative Advantage'.