In order to expand the reach of banking, the Reserve Bank of India on Monday said it is considering making bank licensing process more frequent and allow free entry of banks as and when necessary.
“We propose to carry forward these ideas and come up with a detailed road map of a necessary reform and regulations for free entry and making the licensing process more frequent after we get comments from the stakeholders,” RBI deputy governor KC Chakrabarty said here.
“The document explores possibility of differentiated licence for small banks and wholesale banks, possibility of continuous on tap licensing and the possibility of converting large urban co-operative banks into commercial banks,” he said. Currently the central bank is in the process of issuing new bank licences for which it has received applications from 26 public and private sector entities. The RBI is likely to issue the licences by January 2014. The apex bank has already set up an external committee, headed by former RBI Governor Bimal Jalan, to scrutinise applications.
“With a view to ensuring that the banking system grows in size to meet the needs of a modern economy and improve access of banking services, the RBI is considering giving some additional banking licences to private sector players subject to their meeting our eligibility criteria,” Chakrabarty said.