Finance Minister P Chidambaram has asked the Reserve Bank of India (RBI) to finalise guidelines for new bank licences and start accepting applications for the same in anticipation of the amendment in the Banking Regulation Act. The draft norms have pegged the minimum required capital for promoting bank at Rs 500 crore and limit foreign shareholding at 49% for the first 5 years.
As per the RBI's draft norms released in August 2011, private sector firms or groups owned and controlled by Indian promoters, with diversified ownership, sound credentials and integrity, and having successful track record of at least 10 years, would be eligible to promote banks.
The Minister further said the power or the authority which the RBI wants is already available in the other provisions of the law and with the central bank's own regulations and guidelines for new banking licenses.
Further, if RBI proceeds to receive application and process them, even then the first banking licence is not likely to be issued in the next six or eight months. Hence, with the time the licence is issued and the banks come to existence and the banks begin to function, the banks regulation act would have been amended, the Minister added.
