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Rediff.com  » Business » No preferences, no govt say in issue of bank licences: FM

No preferences, no govt say in issue of bank licences: FM

July 04, 2013 08:13 IST

No preferences, no govt say in issue of bank licences: FM

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As RBI scrutinises 26 applications for bank licences, Finance Minister P Chidambaram said no preference will be shown to applicants and government will have no say in issue of the licences.

"There is no preference. All the guidelines have to be satisfied ... Government will have no say in the selection of the applicant who will get a bank licence. We are not entertaining any sifarishes (recommendations) of the applicants," he told reporters.

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Image: Finance Minister Palaniappan Chidambaram.
Photographs: Issei Kato/Reuters

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No preferences, no govt say in issue of bank licences: FM

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Earlier this week, RBI announced that 26 entities, including Tata Sons, LIC Housing Finance, Aditya Birla Nuvo, Department of Posts, Reliance Capital, L&T Finance and Bajaj Finserv applied for grant of bank licences.

RBI Governor D Subbarao had earlier said that "our effort will be to make that judgement as transparent as objective... as possible...I want to say that not everybody who is fit and proper will be given a (bank) licence because we expect the number of eligible applicants will be much larger than what is meaningful number of licences we can give".

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Image: RBI Governor Duvvuri Subbarao.
Photographs: Amit Dave/Reuters

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The Reserve Bank is expected to grant new licences by March next year.

India has 26 public sector banks, 22 private sector banks and 56 regional rural banks.

Ten banks were licenced on the basis of guidelines issued in January 1993. The guidelines were revised in January 2001 based on the experience gained from the functioning of these banks, and fresh applications were invited.


Image: A cashier (L) counts currency notes as customers wait inside a bank.
Photographs: Krishnendu Halder/Reuters

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