‘Some applicants can apply for differentiated licences’

Differentiated licences will be for services like payments, wholesale banking and lending. The 25 entities which had applied for the licence included Anil Ambani-controlled Reliance Capital, Aditya Birla Group, Bajaj and L&T Finance, Edelweiss, Religare, Indian Infoline, JM Financial, Muthoot Finance and Shriram Finance.

The RBI originally received 27 applications in July 2013, but Tata Sons and Videocon Group withdrew from the race, leaving 25 contenders.

Meanwhile, strongly disapproving requests for “regulatory forbearance” in cases of asset quality stress made by lenders and corporates, Rajan told bankers not to find “artificial fixes” for the problem.

Rajan said the RBI had received requests from lenders and corporates for postponing recognition of stressed assets as “bad loans”, even though it may not have been serviced for three years. “Let’s not try to find artificial fixes. Postponing recognition will not help. If it is not paid today, it won’t get paid tomorrow,” Rajan said, adding that the best way out is to make sure that the asset itself becomes viable.

KYC norms need a relook: Rajan

RBI Governor Raghuram Rajan, while addressing the 10th Convocation of the National Institute of Banking management (NIBM), said that the banking sector should make efforts to be more inclusive and free itself from bureaucratic shackles.

“You can choose one extreme follow the rule, be rigid or you can be flexible and allow every thing to pass. Choose a set of attributes on what you will not compromise your integrity. In case of any dilemma about rules, always check if the deviation would compromise your integrity, if it does do not do it,” he said.

Talking about the current Know Your Customer (KYC) norms, Rajan said that often bureaucratic hassles make it difficult for people to open bank accounts.