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Rajiv Takru, secretary of financial services, told The BRICS Post, “India will give out new bank licences by the end of March next year-that’s the hope.”
The Reserve Bank of India (RBI) on Monday extended the validity period of the in-principle approval it will give a promoter for setting up a bank from one year to 18 months.
RBI released the guidelines for licensing of new Banks in the private sector on its website in February.
According to RBI norms, a company wishing to foray into banking would be required to keep its banking arm completely separated from its other businesses.
A majority of the 196 domestic banks in India are state controlled.
The Indian finance ministry is keen to have more banks in the country to promote financial inclusion and infuse competition that brings in more efficiency in the financial sector.
Finance minister Palaniappan Chidambaram has also indicated at possible mergers and acquisitions (M&A) in the banking industry to allow a few large banks to emerge.
The BRICS Post with inputs from Agencies