RBI Governor Raghuram Rajan on Thursday said that the central bank has sought the Election Commission’s nod over the issue of grant of new bank licence as a matter of caution. “I think (it) is to make sure that any such announcements are not tinged by uncertainty. That’s why it is important to ask the Election Commission whether this meets with the code of conduct. “Think of it as caution, you might call the caution excessive but it’s important to follow process,” he told reporters here when asked about the reasons for approaching Election Commission before issuing new bank licences to private sector. Rajan, who was in the capital to meet finance minister P Chidambaram ahead of the monetary policy announcement on April 1, said the Commission is yet to respond to RBI’s request. According to Election Commissioner HS Brahma, the Commission would take a view on the issue of grant of new bank licences by RBI on March 31. When asked whether new bank licences will be issued on March 31, Rajan said, “I don’t know.” RBI sought the EC’s nod as the model code of conduct came into force.
