India needs larger banks, consolidation greater need: Deepak Parekh
"Still the guidelines are very well thought-through for a comprehensive, pretty fair and transparent process to grant new licenses," he said.
Parekh further said RBI in its final guidelines for new banking licences has taken care of all critical issues such as capital adequacy, foreign holding and rural branches.
"They have not excluded anyone outrightly and now it is their (RBI's) prerogative that how many licences they want to give," Parekh said.
Earlier, there were apprehensions that RBI might not allow companies with exposure to certain high-risk sectors like brokerage and real estate to seek banking licenses, while there were also voices of opposition against large business] houses being allowed to set up banks.
However, the final guideline does not exclude any aspirants on the basis of their business interests and rather focusses on 'fit and proper' criteria for grant of licences.
RBI has said the applicants should have a past record of sound credentials, integrity and financial strength with a successful track record of 10 years. RBI has fixed a minimum equity capital level of Rs 500 crore for the banking license aspirants, while capping the foreign holding in the first five years to 49 per cent and mandating 25 per cent of branches in rural area.
The RBI's decision to open up the sector for new players has been widely
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