Agency reports suggest that C Rangarajan, Chairman of Prime Minister’s Economic Advisory Council wants the Reserve Bank of India (RBI) to give first priority to non-corporate applicants for banking licenses.
Rangarajan has reportedly said that the central bank must look at various types of financial institutions that are available currently and decide. Many of the strong private sector banks today have been at one time or other in the financial system. They can look at these first and look at the others later on, he was quoted as saying by a leading news agency.
The recent approval by the Parliament for the Banking Laws (Amendment) Bill enabled RBI to take steps to invites application for new bank licenses. The bill gives additional power to RBI, particularly to remove the directors or change the board of directors, if it feels there was something wrong.
As a first step towards this, the central bank is in the process of finalising the guidelines for giving new bank licences.
In the draft guidelines on new licences, business houses with successful track record and a minimum capital of Rs 500 crore were proposed to be allowed to set up commercial banks. Currently, the minimum capital requirement for opening a bank is Rs 300 crore.
According to the draft guidelines, companies primarily engaged in the real estate business or stock broking will not be eligible for promoting a bank.
Leave a Reply
You must be logged in to post a comment.