New banking licences unlikely this fiscal as govt mulls controls
22 Mar 2011
New banking licences will be issued only after the government vests more powers with the Reserve Bank of India to control the new entities - a process that is unlikely to be over in the next fiscal, says a report.
Amendments to the Banking Regulation Act that will give more powers to the RBI are likely to be tabled in the monsoon session of Parliament. The act will in all probability be referred to a standing committee, effectively puncturing all hopes of industrial houses bagging a licence in fiscal 2011-12.
''Empowering the RBI is essential for obtaining information about the other businesses of the corporate houses seeking banking licences in order to protect depositors' interests,'' Kolkata-based The Telegraph quoted unnamed officials as saying.
The government is also likely to set up a panel to vet the draft entry rules framed by the RBI. ''Effectively, new licences will be given by the end of 2012,'' said the officials.
The apex bank had brought out a discussion paper in August on licences to business houses and non-banking finance companies, and regulations to foster competition.
Finance minister Pranab Mukherjee had said in his budget speech that the RBI was planning to issue the guidelines before the close of the current financial year.
