Guidelines for new bank licences likely in 6 weeks

Tags: News

FinMin will be sending final comments to RBI on draft shortly

The RBI is likely to issue final guidelines for grant of banking licences to new players within the next 4-6 weeks, while those interested in setting up new banks, including giants like Reliance, Religare and L&T groups, have begun doing the groundwork.

According to sources in finance ministry, the Reserve Bank may release its final guidelines for new bank licences by January-end or early next month.

The finance ministry is currently in the process of sending its final comments to RBI on the draft guidelines issued by the central bank on the matter, after which the final guidelines should be announced. The RBI is already in the process of collating the comments received from various stakeholders on the draft guidelines.

RBI deputy governor, Anand Sinha, who is incharge of the department of banking operations and development at the central bank, is scheduled to retire next month and RBI should finalise the norms before his retirement, sources said.

A number of large corporate houses, including Anil Ambani-led Reliance group, financial conglomerates Re­l­igare and Shriram gro­ups, engineering-to-technology major L&T group and Aditya Birla group, are said to be interested in entering the banking business depending on the regulatory framework.

Industry sources said that most of the banking aspirants have begun doing their groundwork and quite a few large corporate houses are confident of meeting the regulatory framework despite some voices being raised in certain quarters about concerns of possible conflict of interest in case of industrial houses being given banking permits.

Last week itself, noted economist and Nobel laureate Joseph Stiglitz said corporates should not be allowed to enter banking space as it has the potential to create conflict of interests.

However, experts back in India dismiss the concerns and say that bank licenses should be given to those who can safeguard the interest of consumers and ensure liquidity, irrespective of them being a corporate house or anything else.

“Bank licence should be given to promoters with strong track record and credence irrespective of being a corporate house or an NBFC, as depositors interest is paramount. RBI has guidelines in place which is best across the globe and is testified by the fact that very few banks have failed in the country,” said eminent chartered accountant S Ravi, who is on board of various public companies.

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