Senior BJP leader and chairman of the parliamentary standing committee on finance Yashwant Sinha wants the RBI to immediately stop screening applicants for new bank licences and roll back the process because the multi-party House panel has unanimously rejected a provision allowing the entry of corporates in the crucial sector.
The panel’s opposition to the process comes even as the RBI on September 28 said that it is considering corporate candidates for the new bank licences for many reasons, including the need to promote financial inclusion.
Sinha told FE: “(Bank) Licences have not been issued so far; only applications have been submitted. Therefore, the process can be rolled back and it cannot be legally challenged by anyone. We have called upon the RBI and the government to reconsider the decision (to allow corporates in banking). If the RBI and the government have another view, let us agree to disagree."
He added that if the government can look at rolling back the ordinance against disqualification of convicted lawmakers from the stage where it has gone to the President, then the process of allowing corporates into the banking sector can also be rolled back.
This is because the new bank licence process is at an early stage, he said, adding that the panel headed by him, which comprises members from parties across the political spectrum, including from the ruling Congress, wants a rollback.
Sinha stated that the panel’s report will be submitted to the Lok Sabha on Monday, indicating that the matter will be taken up for discussion in Parliament in the next session.
B Mahapatra, executive director, RBI, had said recently in Pune: "Financial inclusion being the overall objective of the current bank licencing policy, it was considered that industrial houses with their deep pockets could fill the gap as financial inclusion is a capital and technology-intensive project.”
Among the leading corporates who have turned in their application include the Tata group, Bajaj Finserv belonging to the Rahul Bajaj group, Reliance Capital controlled by Anil Ambani, Aditya Birla Nuvo Ltd of the Aditya Birla group, and L&T Finance of Larsen &