RBI DRAFT GUIDELINES FOR NEW BANK LICENCES IN JANUARY

Reserve Bank of India (RBI) will release the draft guidelines for new bank licences by the end of January, its chief said here on Thursday.

RBI Governor Duvvuri Subbarao told reporters after the apex bank's board meeting that it had sought feedback from the public on several issues relating to the new licences.

"The first was about the initial capital, second on the way promoter's capital should be diluted, thirdly whether corporate houses should be considered for licensing. Also, we sought feedback on whether existing NBFCs (non-banking financial company) be allowed to convert into banks and the business model of the new applicants," he said.

The RBI has received diverse opinions from the public on the issues, Subbarao said.

"We found that the opinion we had on the issues was on a broad spectrum. On issues like whether the corporate houses should be allowed and the amount of initial capital, opinion was divided," he said.

"There was no clear cut opinion, one way or the other on each of these issues," he said.

The RBI will now study the feedback before putting up the draft guidelines "by January 2011".

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/RBI-draft-guidelines-for-new-bank-licences-in-January/articleshow/7071866.cms