Will wait for RBI guidelines on new banks before commenting: Pranab

Will wait for RBI guidelines on new banks before commenting: Pranab

New Delhi: Amid debate over whether or not to allow corporate houses to enter the banking sector, the Finance Ministry on Wednesday said it would wait for the RBI’s draft guidelines before making a comment on it.

“Let’s see how it (RBI draft guidelines) comes... and thereafter we will make comment," finance minister Pranab Mukherjee told reporters here.

According to sources, the Finance Ministry is not in favour of immediately allowing the large corporates to open banks and has conveyed it to the RBI.

The RBI, they said, may initially give only four licences mainly to the NBFCs.

The apex bank is expected to release draft norms on the entry of new banks next week.

The RBI had last year floated the discussion paper on allowing new banks entry and had invited stakeholders’ comments on the same.

The apex bank is also likely to post on the website of the central bank the guidelines for public comments.

All applications received in this regard would be referred to an external expert group for examination and recommendations to the RBI for granting licenses.

The government had earlier said that although Expressions of Interest of some private entities have been received by RBI, they are to be processed once the guidelines for issuing fresh banking licences to private players are finalized.

The move follows the announcement made by finance minister Pranab Mukherjee in the Budget speech of 2010-11 to give more banking licences.

Non-banking financial companies could also be considered, if they meet the RBI’s eligibility criteria.