RBI panel set up to scrutinise new bank licences

Panel may submit report by January 2014

The Reserve Bank of India (RBI) on Friday nominated three members to the high level advisory committee, headed by former RBI Governor Bimal Jalan, formed to recommend sanctioning new licenses to the private banks, it is learnt.

The central  bank at its Board meeting on Friday finalised the names of people in the external committee who would decide the fate of 26 applicants willing to start private banks.

RBI Governor Raghuram Rajan is understood to have picked three members such as former RBI Deputy Governor Usha Thorat, former Sebi Chairman C B Bhave and Nachiket Mor had been appointed to the committee.

Rajan is hopeful that the committee will meet the deadline to submit its report. “We are trying to get the report finalised by January 2014 before RBI Deputy Governor Anand Sinha retires,” Rajan reportedly said in Raipur. Sinha is in charge of banking operations and development portfolio. He added that hopefully, the process would be completed by the time.

When asked about the induction of Nachiket Mor in the committee despite he being a board member of the RBI, Rajan clarified that he (Nachiket Mor) is not an employee of the RBI. “He is only a board member and not an employee, and hence can be appointed in the expert committee,” Rajan added.

The committee would act as a bridge between the RBI and the outsiders, he said. The RBI chief also said the fate of corporate venturing into the banking business would also be decided by the expert committee.

“The decision whether to allow corporate in banking would be taken after the committee submitted its recommendation on the issue,” he said. The twin swap window, which the central bank made available to banks, fetched $5.6 billion as of now. “We don’t know how much inflow can be expected before the facility closes on November 30,” Rajan said.

Earlier, the RBI at the board meeting discussed on the expansion of banking in the unbanked sector of Chhattisgarh, the state where the central bank’s board met after seven years. The last board meeting of the RBI in Raipur was held in 2006.

“For the e-payment, a small task force will be set up in the state to suggest how bank can help the government,” Rajan said, adding that the process will start once the state government gives name for the task force.