Pranab Mukherjee’s decision to allow companies and NBFCs to set up private banks in the country has raised the hopes of many like ADAG and Aditya Birla Nuvo. But RBI has expressed its reluctance to ease its norms. Last time RBI has permitted new private banks was in 2002 to Kotak Mahindra Bank and Rabo Bank.
For more than a decade, there was pressure on RBI and government to allow private players to enter the sector, which they have resisted till date. A committee headed by previous RBI deputy governor SS Tarapore as well as the Raghuram Rajan Committee had recommended granting licenses to private companies.
Kumar Mangalam Birla, told ET NOW that he was very eager to establish his own bank. Ajay Srinivasan, CEO, financial services, Aditya Birla Group, said the group will submit an application for a licence. He said, the group is sure to fulfill any suitability criteria that may have to be fulfilled.
But within 2 hours after Mr. Mukherjee’s speech, Corporate India’s aims were watered down as RBI had clarified that its strict entry restrictions for those looking to enter banking will remain. Deputy governor Usha Thorat told media that elementary principles of governance will not be conceded. She said RBI will examine the applications once the new guidelines are put in place, for which she did not mention any timeline.
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