Survey recommends two-tier licence regime for banks
The economic survey for 2010-11 suggests two types of licenses for companies expecting a banking license. The two tier system envisages one licence to provide basic banking to meet objectives of financial inclusion and other for full range of services based on minimum capital requirement.
February 27, 2011 / 12:58 IST
The economic survey for 2010-11 suggests two types of licenses for companies expecting a banking license. The two tier system envisages one licence to provide basic banking to meet objectives of financial inclusion and other for full range of services based on minimum capital requirement.
It recommends micro-finance institutions and non-banking finance companies to apply for a basic banking license. Industrial houses wanting to apply for a full service banking licence could be given one only after addressing conflict of interest issues. The survey also indicates allowing foreign investment in the banking sector on a reciprocal basis. This means established banks in countries that allow Indian banks to expand could be permitted.Quick comment: Mobile phone banking needs to grow to help achieve targets of financial inclusion. A basic license could just help accelerate the process. India now has more mobile phone accounts than bank accounts. The government is unlikely to allow mobile phone companies to operate banking services. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
