Clarity on number of new bank licences by October: Secretary

Clarity on number of new bank licences by October: Secretary

The issue of new bank licences would be clear by October after scrutiny of applications by the Reserve Bank of India, Financial Services Secretary Rajiv Takru said Tuesday.

The Reserve Bank of India has set July 13 as the last date for the submission of applications.

Asked how much time would be taken for the entire process to be completed and how many banking licenses could be given out, Takru said: "There is a lot of scope for new banks. We have to look at the economies of scale and number of branches and the capacity of the person who gets the license, how many branches they can open, what kind of time-frame they would need."

"So you need to wait at least till the interim scrutiny by the first committee of RBI gets over which would be around September-October. By the time they know how many meet the minimum benchmark after scrutinising applicants, we would be able to react to that. Giving numbers prematurely at this time would be silly," he told a television channel.

"We would need to work backwards depending on what kind of banking coverage is available in India at the moment. The figures are around 6.3 per lakh or around 7 lakh branches. We are considerably under banked. This is going to be a considered decision which is going to be made and firmed up only once we know the really good applicants from those who have applied."

The Reserve Bank of India Monday said it had extended the validity of in-principle approval for new banks to 18 months from one year. In the clarification on draft norms, the banking regulator made it clear that track record of all group companies, including non-financial ones, would be considered while vetting the applications.

Takru said the clarifications issued by the Reserve Bank of India were clear and the regulator has been as fair as possible in its clarifications.

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