The Reserve Bank of India (RBI) has decided on Apri 2, 2014 to grant "in-principle approval to two applicants viz., IDFC Ltd and Bandhan Financial Services Pvt Ltd, to set up banks under the guidelines on licensing of new banks in the private sector issued on February 22, 2013. The High Level Advisory Committee (HLAC) set up by the RBI has recommended the above mentioned companies as suitable for grant of in-principle approval. The HLAC also recommended that application of Department of Post for the banking licence should be considered separately by RBI in consultation with the Government of India.
The "in-principle" approval granted will be valid for a period of 18 months during which the applicants have to comply with the requirements under the guidelines and fulfill the other conditions as may be stipulated by the RBI. RBI would consider granting of a licence for commencement of banking business under Section 22(1) of the Banking regulation act, 1949 once it is satisfied that the applicants have complied with the requisite conditions laid down by the RBI as part of "in-principle" approval.