The Reserve Bank should give preference to the non-corporate sector for new bank licences, Prime Minister’s Economic Advisory Council ChairmanC Rangarajan said.
“It is possible for the Reserve Bank to start with initially non-corporate business and find out whether there are suitable applicants and thereafter proceed to look at the other applicants,” he said in an interview.
The RBI is in the process of finalising the guidelines for giving new bank licences after Parliament approved Banking Laws (Amendment) Bill last month.
The central bank, Rangarajan said, “should 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 it first and look at the other later on,” he said. Read More
The government on Tuesday cleared the decks for the Reserve Bank of India ( RBI) to initiate the process to issue new banking licences and widened the window for infusion of capital into the banking sector.
The Lok Sabha cleared the Banking Laws (Amendment) Bill, 2011, after Finance Minister P Chidambaram agreed to drop the contentious proposal on allowing banks to do futures trading. He also clarified status quo would be maintained on the jurisdictions of RBI and the Competition Commission of India ( CCI) in the banking sector.
“Since it is important that the Bill is passed, I am dropping the controversial clauses.” While the central bank would regulate the banking sector, the competition watchdog would look at anti-competitive practices, Chidambaram said.
IN a much-awaited big ticket announcement that hopes to boost the financial sector, the Reserve Bank of India is set to allow the opening of new banks and invite applications for licences this month.
A top government source said the central bank will issue the final guidelines for setting up new banks and invite applications before it releases its second quarter review of the monetary policy on October 30. It is expected to offer four slots for new banks. The move has been brought forward to give a sense of direction and purpose to the current phase of economic reform, the source added.
New banks are expected to make the sector more competitive and promote financial inclusion through greater access to banking services. The RBI had last issued guidelines for new banks in 2001 and given licences to Kotak Mahindra Bank and Yes Bank in 2003. Read More
The government will try to legislate at least 3-4 economic bills in the ongoing session, pushing forward the financial sector reforms, Finance Minister Pranab Mukherjee said today.
“At least 3-4 bills for which we have received the recommendations of the Standing Committee, I will try to get those legislated in the later part of the (Budget) session,”
Mukherjee told reporters after meeting the Reserve Bank board here.
He further said the Standing Committee on Finance, headed by Senior BJP leader Yashwant Sinha, is expected to give its report on the major economic reform bills by the beginning of Monsoon Session. Read More