26 public, private entities apply for new bank licences: RBI

The Reserve Bank of India (RBI) said on Monday it had received 26 applications for new bank licences from private and public entities, with Tata Sons Ltd, the holding company for India's largest conglomerate, among those seeking the right to set up the first new Indian banks since 2004.

Other applicants include Reliance Capital, controlled by billionaire Anil Ambani, and Aditya Birla Nuvo, part of the diversified Birla conglomerate.

Public sector entities like Life Insurance Corporation of India (LIC) and the postal department too have applied for licences.

In February, the RBI issued guidelines to allow corporate houses to set up banks, part of an effort to expand access to financial services in a country where only about half the population has a bank account.

Licence winners are expected to be announced by the first quarter of 2014.

RBI Governor D Subbarao had earlier said that "our effort will be to make that judgement as transparent as objective as contestable as possible...I want to say that not everybody who is fit and proper will be given a (bank) licence because we expect the number of eligible applicants will be much larger than what is meaningful number of licences we can give".
     
In its clarification, the RBI had said the entities getting licences to open new banks will be given 18 months to open branches, and promoters would have to transfer their holdings to the non-operative financial holding company (NOFHC) in a stipulated period.