No new banking licences without legal backing, says Subbarao

A day after Finance Minister P Chidambaram asked the Reserve Bank to speed up the process of issuing new bank licences, governor D Subbarao today said it would be not possible without fulfilling the enabling conditions for the same.

"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'.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The current value of the rupee does not merit market intervention

    The rupee, losing 40 paise per month against the dollar since May, is expected to remain under pressure till the calendar runs out on December 31, bef

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Zehra Naqvi

How smells evoke strong memories

Remember that time when a passing fragrance transported you to ...

Dharmendra Khandal

Indian zoos need a fresh approach

Recently, when a man jumped in a tiger trench of ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture