Bank licences by Dec-end; FinMin, RBI plan guidelines

Sources in the finance ministry indicate that the final guidelines for issuing bank licences are likely to be announced by the end of December. The finance ministry will write to the RBI on Friday to process the guidelines, reports CNBC-TV18's Aakansha Sethi.

The finance ministry is now preparing a letter that will be sent to the RBI on Friday  morning regarding the submission of the final guidelines that will be later considered by the finance ministry.

Some of the suggestions listed by the finance ministry include the categorisation of banks banks into three groups - local, regional and national banks and international banks.

The finance ministry has also suggested the level of capital requirement start with little as Rs 30-40 crore for local banks to promote financial inclusion and the increase the amount of capital as the region of operation of the bank widens. So, for regional banks the capital requirement will be a little higher and for national banks there will a requirement of Rs 500 crore. There have been demands for raising the minimum capital requirement of Rs 500 crore, but at this point in time the finance ministry believes that this Rs 500-crore guideline is sufficient.

The Banking Bill also, according to the finance ministry, allows foreign to set up subsidiaries and the hike in the cap on voting rights will result in renewed investor interest in PSU banks and this could possibly cause increased institutional investor interest.