With the Reserve Bank saying that it will give more time to lincence seekers to open banks, it has become clear the governor Subbarao will not handout the any new bank licence before his term ends on September 7. The central bank will issue a consolidated clarification on the new licence clarifications today.
This could also mean that the deadline for submitting applications may be extended. The final draft guidelines had said aspirants would get a year to open bank branched after in-principle approval to do so, failing which the licences were to be withdrawn. Media report say RBI has got over 400 queries from aspirants after the final guidelines were announced in February with most of the queries pertaining to the non-operative financial holding company structure, a mandatory condition to seek a new bank licence.
The last time RBI allowed new private sector banks was in 2002-03 and prior to that in the 1990s, when four of the present largest private banks—ICICI, HDFC Bank, Axis Bank (as UTI Bank) and Kotak Mahindra Bank were allowed to set up.
