External group to examine,recommend new bank licences

A detailed discussions will be held with all stakeholders on the discussion paper and guidelines will be finalised based on the feedback,the RBI said in its annual credit and monetary policy. Finance minister Pranab Mukherjee in his budget speech had announced that the RBI was considering giving some additional banking licences to private sector players. NBFCs could also be considered,if they meet the RBI’s eligibility criteria. About 12-15 NBFCs and corporate houses including the Tatas,AV Birla Group,Anil Ambani-promoted Reliance ADAG group which are already having financial sector exposure have already shown their keenness to join the race to apply for bank licences. The Shriram Transport Finance has made its intentions clear on its banking foray and got internal approvals for the same.

The National Bank for Agriculture and Rural Development (Nabard),which has begun the process of restructuring its business operations,is not averse to the idea of setting up a bank,its chairman U C Sarangi had said. Nabard had appointed global management consultancy firm,Boston Consulting Group to prepare a report to restructure and diversify its operations to leverage its expertise in refinancing.