RBI names 26 applicants for new banking licence

Moneycontrol Bureau

The Reserve Bank of India (RBI) received 26 applications from different institutions, which are in the fray to float banks. The last date of application for a new bank licence ended on Monday.

While three government organizations including India Posts, Tourism Finance Corporation of India and LIC Housing Finance figured in the list, many branded companies too sought RBI's permission to start banking business. Those brand names included Aditya Birla Nuvo, L & T Finance Holdings, TATA Sons from Mumbai and Bajaj Finserv from Pune as well as Shriram Capital from Chennai.

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Other prominent non-banking finance companies which are interested to make their presence in India's Rs 77 lakh crore banking industry were IDFC, Edelweiss Financial, Muthoot Finance, Reliance Capital, J M Financials and Religare Enterprises.

The rest was a group of housing finance companies, domestic brokerages, financial services companies, micro finance companies and a white good manufacturer – Value Industries (a Vediocon group company).

Those included Bandhan Financial Services, Magma Fincorp, SREI Infrastructure and Suryamani Financing Company from Kolkata; IFCI, Indiabulls Housing Finance, INMACS Management Services,  Smart Global Ventures from National Capital Region; India Infoline, J M Financial Services from Mumbai; Janalakshmi Financial from Bangalore and UAE Exchange & Financial Services from Kochi.

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Last time when the central bank had issued banking licence was in 2002-03. Two licences were issued to Yes Bank and Kotak Mahindra Bank. In the first move of privatisation of the banking sector, 10 players were allowed in the mid-1990s including ICICI Bank, and HDFC Bank, the today’s majors.

Currently, there are 26 state-owned and 22 private sector lenders. Only 35 percent of India's adult population has accounts with banks and other financial institutions compared to a global average of more than 50 percent.

Both the government and RBI have been focusing on financial inclusion to expand the banking services to every nook and corner of country. Accordingly, RBI guidelines mandated 25 percent of bank branches to be set up in rural areas.

saikat.das@network18online.com