India’s central bank starts process for new bank licenses

MUMBAI - The Reserve Bank of India (RBI) Tuesday began the preparatory process to issue new commercial banking licenses to private sector players as suggested by Finance Minister Pranab Mukherjee in his budget speech for this financial year.

RBI Governor D. Subbarao said a discussion paper will be prepared by the central bank and put up on its website by the end of July for wider comments and feedback.

“Thereafter, detailed discussions will be held with all stakeholders on the discussion paper and guidelines will be finalised based on the feedback,” Subbarao told chief executives of commercial banks while unveiling the annual monetary policy here.

“All applications received in this regard would be referred to an external expert group for examination and recommendations to the Reserve Bank for granting licenses,” he said.

A host of Indian corporate houses, including the Reliance Anil Dhirubhai Ambani Group, the Tatas and the Aditya Birla Group, as also non-banking finance companies like Muthoot Pappachan Group and Srei Finance are keen to enter the commercial banking industry.