Some applicants may be better at differentiated banking: Rajan
6 April 2014 3:57 AM IST
Reserve Bank Governor Raghuram Rajan on Friday defended handing out just two licences out of the 25 banking applicants saying the selection panel felt that some of them were better placed to serve as differentiated banks.
‘We went through the list of applicants and this was the set of applicants that the Jalan committee as well as the Reserve Bank were comfortable with.’
‘We have opened up the possibility that those left out applicants can apply again once we put the licences on-tap as well as we create differentiated licences.
‘Some of the applicants may be better off applying for a differentiated licence rather than for the full licence,’ Rajan said when asked about the very conservative approach to the much-touted licensing process.
The RBI agreed to consider the application of India Post in consultation with the government and advised other applicants to apply afresh after the central bank comes out with new guidelines on granting licences 'on tap'.
‘The in-principle approval granted (to two entities) will be valid for a period of 18 months during which the applicants have to comply with the requirements under the guidelines and fulfil the other conditions as may be stipulated by the RBI,’ the central bank said in a statement.
The RBI originally received 27 applications in July 2013, but Tata Sons and Videocon Group withdrew from the race, leaving 25 contenders. The entities that did not succeed in getting bank licences include Aditya Birla Nuvo, Bajaj Finserv, Reliance Capital, LIC Housing Finance, L&T Finance, Indiabulls Housing Finance, Edelweiss, IFCI, India Infoline, J M Financial, Muthoot Finance, Religare, Shriram Capital and Srei Infrastructure.
‘We went through the list of applicants and this was the set of applicants that the Jalan committee as well as the Reserve Bank were comfortable with.’
‘We have opened up the possibility that those left out applicants can apply again once we put the licences on-tap as well as we create differentiated licences.
‘Some of the applicants may be better off applying for a differentiated licence rather than for the full licence,’ Rajan said when asked about the very conservative approach to the much-touted licensing process.
The RBI agreed to consider the application of India Post in consultation with the government and advised other applicants to apply afresh after the central bank comes out with new guidelines on granting licences 'on tap'.
‘The in-principle approval granted (to two entities) will be valid for a period of 18 months during which the applicants have to comply with the requirements under the guidelines and fulfil the other conditions as may be stipulated by the RBI,’ the central bank said in a statement.
The RBI originally received 27 applications in July 2013, but Tata Sons and Videocon Group withdrew from the race, leaving 25 contenders. The entities that did not succeed in getting bank licences include Aditya Birla Nuvo, Bajaj Finserv, Reliance Capital, LIC Housing Finance, L&T Finance, Indiabulls Housing Finance, Edelweiss, IFCI, India Infoline, J M Financial, Muthoot Finance, Religare, Shriram Capital and Srei Infrastructure.
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