New bank permits could take longer than expected and are unlikely to be given out early next year as an expert committee, led by former RBI Governor Bimal Jalan, on Wednesday said it will submit its report on applications for the permits three months after the central bank completes scrutiny of all applicants.
“RBI is doing intensive scrutiny of all the parameters as per the guidelines. They (RBI) have set three months time after RBI has done its scrutiny,” Jalan told reporters on the sidelines of Delhi Economics Conclave-2013.
The Reserve Bank of India (RBI) had earlier indicated that the permits for new banks would be given out around January 2014. The Jalan committee is expected to meet next Monday to receive all the documents from the RBI on the applications.
But RBI, which is in the process of scrutinising applications, still has to get the feedback from investigative agencies regarding the 24 applicants. “We are trying to frame a policy on bank permits. They (the banks) are going to deal with public money. Therefore we don’t want to rush; we will take decision which is in our interest, public interest... Time per se to me is not that important,” Jalan said.
Originally, 26 applicants had sought new bank permits from the RBI, including Aditya Birla Group and Anil Ambani led Reliance Capital. But two corporate houses - Value Industries (part of Videocon Industries) and Tata Sons have since then withdrawn their applications.
The RBI had issued guidelines for licensing of new banks in the private sector on February 22 and issued clarifications in the first week of June. Earlier this week, the Parliamentary Standing Committee on Finance in its report too had urged the central bank to review guidelines for new bank permits and prevent industrial houses from applying for banking licences.