F biz Feb 25, 2014
The Bimal Jalan-headed committee, scrutinizing the 25 bank license applications, submitted its recommendations to the Reserve Bank today amid speculations that Election Commission's Code of Conduct will have a bearing on the process of awarding new bank licenses.
Sources in the RBI told CNBC-TV18 that the Jalan panel has submitted its recommendations on eligibility of all applicants and a final call will be taken by the central bank.
"We have submitted report (on new bank licences) to RBI," Jalan, a former Reserve Bank Governor, said after a four-hour meeting here, PTI reported.
Finance ministry sources indicated that prima facie Election Code of Conduct doesn't apply to RBI but a final decision will be taken after the EC's issuance.
Earlier, speaking to CNBC-TV18, sources saidcriminal investigation doesn't bar applicants from obtaning a license since registration of case, without conviction, is not enough to strike down applicants.
The Jalan Panel has assessed the reports of all investigative agencies.
The committee held its third and final meeting today before submitting its recommendations to the central bank. The panel had first met on November 1. The report contains names of entities eligible for bank licences. It was not immediately known how many applicants have been shortlisted by the high-leveladvisory panel.
The licences are likely to be awarded my March-end and the election code of conduct will not affect the process, banking Secretary Rajiv Takru said.
Guidelines for setting up new private banks were issued in February 2013. The last day for applications was July 1. The RBI received 27 applications and subsequently, Tata Sons Ltd and Value Industries Ltd withdrew.
Anil Ambani's Reliance Group, Aditya Birla Group and Bajaj Finance are some of the prominent names in the race. Muthoot Finance, Religare Enterprises, L&T Finance Holdings, India Bulls Housing Finance Ltd are among the other companies who have applied for licences.
Public sector units in the fray are India Post and IFCI.
Kotak Mahindra Bank and Yes Bank were the last two entities to get banking licences from the RBI in 2003-04.
In the past 20 years, the RBI has licensed 12 banks in the private sector in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993.
India has 27 public sector banks, 22 private sector banks and 56 regional rural banks.
With inputs from PTI
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