Mumbai: Finance minister P. Chidambaram on Saturday reiterated the ministry’s pitch that Reserve Bank of India (RBI) should allow more banks to come up rather than wait for the Banking Regulation Act to get amended.
“It is the government’s intention to urge RBI to quickly make the finalization of guidelines (for new bank licence) and allow application for new banks,” Chidambaram said at the launch of Bank for the Buck, by Mint’s deputy managing editor Tamal Bandyopadhyay.
“We can’t open 1,000 branches, we can’t achieve financial inclusion ... Unless new licences are given,” he said.
Chidambaram said the laws have remained the same or have become even stricter now than what it had been in 1993 when new bank licences were given last. “Hence, there is no reason why RBI should delay giving new licences,” he said.
RBI governor D. Subbarao recently said that unless legal issues are clear, RBI cannot give licences for new banks.
Chidambaram said the government will continue with its reforms process.
“The flame of reform is still very much alive... I have in my list over a 100 items and I look at that list everyday to see how much progress we are making.”
Among other issues, the government’s priorities include formation of the proposed National Investment Board (NIB) that would cut through the bureaucracy of getting permission from multiple authorities for any projects.
The finance minister said Prime Minister Manmohan Singh has assured the minister to bring out a paper on NIB in two weeks.
“Chances of financial reforms Bill being passed in this Parliament session is extremely good.”
He also urged the private investors to invest more in projects and cautioned cash-rich PSU firms to spend more.
“I have told PSU companies that you cannot sit on piles of cash. You can either use it or lose it,” Chidambaram said, adding that this is the best time to invest in the economy.