Mumbai: IDFC Limited and Bandhan Financial Services Private Limited have been granted “in principle” approval to set up banks under the Guidelines on Licensing of New Banks in the Private Sector issued on February 22, 2013.
The RBI in a statement on Wednesday said the “in-principle” approval granted will be valid for a period of 18 months during which time the applicants have to comply with the requirements under the guidelines and fulfil the other conditions as may be stipulated by the RBI.
If the applicants have complied satisfactorily with the requisite conditions laid down by the RBI as part of “in principle” approval, they would be considered for grant of a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949 the RBI said. Until a regular licence is issued, the applicants would be barred from doing banking business.
RBI governor Raghuram Rajan acted quietly and swiftly after the Election Commission had on Monday given the RBI the green signal to go ahead with issuing new bank licences. Even till Wednesday morning he had kept his plans secret when a channel interviewed him on this issue.
The two applicants were also recommended as suitable for grant of “in principle” approval by the High Level Advisory Committee (HLAC) set up by the RBI and headed by former RBI governor Bimal Jalan. The HLAC also recommended that in the case of the Department of Posts which has applied for a licence, it would be desirable for the RBI to consider the application separately in consultation with the Government of India. The RBI has accepted the recommendation of the HLAC.
