The Reserve Bank of India (RBI) is all set to invite applications for licences to open four new banks, a top government source revealed.

The government source said that the central bank would issue guidelines for the opening of new banks and invite applications before the release of its second quarter monetary policy review on October 30.

The central bank is expected to offer a total of four slots for new banks, and the source added that the move aimed at giving a sense of direction and purpose to the ongoing economic reforms.

The reported four new banks will make the Indian financial sector more competitive by promoting financial inclusion by means of providing consumers with greater access to banking services.

Speaking to media persons, RBI Governor D Subbarao recently said, "In the next few weeks, we have to determine what the final outcome might be. That would determine our monetary policy calculation."

Since the year of 1991, the central bank has issued licences to twelve private banks. Ten of these twelve banks were established on the basis of guidelines issued in 1993, while two were set up on the revised guidelines issued in 2001.

The minimum capital requirement for each of the reported four banks will be pegged at around Rs 1,000 crore.

It appears as if RBI has accepted the government position that it is not compulsory to wait for the acting out of the Banking Laws Amendment Bill before the issuing of final guidelines. But, the new licences will be issued only after the bill is passed by parliament.