RBI can soon announce rules for new bank licenses: says deputy governor

RBI can soon announce rules for new bank licenses: says deputy governorThe Reserve Bank of India (RBI) can soon announce the rules for giving new bank licenses as its consultations with the union finance ministry on the guidelines for the same are in the final stage, Deputy Governor Anand Sinha said.

Mr. Sinha said that the central bank would likely soon arrive at a consensus with the finance ministry on whether to let real-estate developers and brokerage firms to open banks or not.

In its draft guidelines on new bank licences, the central bank had said that real estate, construction and brokerage firms would not be allowed to open banks. But, the government has been pressuring the central bank to give licences to these entities.

Speaking on the topic, Mr. Sinha said, "When there is consultation, obviously, you have to take into account the other side, its viewpoints. We will come to a mutual position and then issue the guidelines."

In December last year, the government approved a proposal to give more powers to the RBI, including allowing it to temporary takeover private banks in the event of any operational irregularities.

The government also provided the central bank with the power to inspect the books of entities associated with banks, to help the central bank protect banks from risks that entities linked with them may be exposed to. It will also prevent potential wrongdoings such as transfer of savers' money to group companies.

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