Ex RBI governor Jalan to screen new bank applications

New RBI governor Raghuram Rajan said the RBI will soon constitute a committee under former RBI governor Bimal Jalan to screen applications for new bank licences after an initial compilation of applications by the RBI staff.

The RBI will give out new bank licences consistent with the highest standards of transparency and diligence, he said.

''I hope to announce the licences within, or soon after, the term of DG Anand Sinha, who has been shepherding the process (his term expires in January 2014), Rajan added.

He also proposed a differentiated Iicensing policy for small banks and wholesale banks and the possibility of continuous or ''on-tap'' licensing as also the possibility of converting large urban co-operative banks into commercial banks.

RBI has already proposed to encourage qualifying foreign banks to move to a wholly owned subsidiary structure, where they will enjoy near national treatment. ''We are in the process of sorting out a few remaining issues so this move can be made,'' Rajan said.

He also proposed the setting up of a committee headed by Nachiket Mor to review all aspects of the current approach to financial inclusion and suggest the way forward.