No decision yet on new bank licences by RBI: EC

Tags: News
The Election Commission has not taken a decision on the Reserve Bank's request to move ahead with a proposal to grant new bank licences.

According to sources, the matter is still under consideration of the Commission, which met today, and a decision will be taken shortly.

Last week, Election Commissioner H S Brahma had said the request would most likely be taken up by the Election Commission on March 31.

Finance Minister P Chidambaram today said although there was no need to refer the proposal, it had been done out of abundant caution.

"Governor Raghuram Rajan made it clear even on that they referred to EC only out of abundant caution. This process had started almost two and a half year ago. This is the process where the government has no role at all," Chidambaram said.

Inviting, screening, scrutinising and selecting candidates for grant of bank licence is a purely RBI-driven process and the government has no role, he had said.

The RBI sought the Commission's nod as the model code of conduct came into force with the announcement of general election on March 5.

Final guidelines for setting up new private banks were issued in February 2013. The last day for applications was July 1.

The RBI received 27 applications and subsequently, Tata Sons Ltd and Value Industries Ltd withdrew.

Public sector units India Post and IFCI and private sector Anil Ambani group and Aditya Birla group were among the 25 players in the fray for bank licences. Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital have also applied.

In the past 20 years, the RBI has licensed 12 banks in the private sector in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993.

Kotak Mahindra Bank and Yes Bank were the last two entities to get banking licences from the RBI in 2003-04.

EDITORIAL OF THE DAY

  • Mob rage against the Tanzanian woman betrays racial and gender prejudices

    The mob rage in Bangalore against the Tanzanian woman is a national disgrace from which we can never recover even if we punish the wrong doers.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sachin Shridhar

VIPism is casteism by another name

Much has been written and lamented about the all-pervasive VIP ...

Zehra Naqvi

‘What if the British never came to India?’

Legendary Canadian writer Margaret Atwood proves as elusive to the ...

Bubbles Sabharwal

It's the life in your years that counts

We are all in a sense pilgrim souls enjoying the ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture