Chakrabarty says only provisional list of new banks by Jan

Reserve Bank Deputy Governor K C Chakrabarty has said only a provisional list of new bank licencees will be announced by January and it will take at least two years for a player to become operational.

"Let me clarify, no new bank will come by January. A provisional list of applicants who are eligible to get a licence will be decided in January. New banks will take at least two years to come," he said here over the weekend.

RBI Governor Raghuram Rajan has been repeatedly assuring that some concrete action will be taken on issuing new bank licences before the end of the term of deputy governor Anand Sinha, who is in charge of banking department, in early February.

After announcing a panel headed by former RBI Governor Bimal Jalan to look into the issue, Rajan on Friday followed up by announcing the remaining members of the committee.

The panel includes former RBI deputy governor Usha Thorat, former Sebi chief CB Bhave and a former executive director at ICICI Bank Nachiket Mor.

Finance Minister P Chidambaram on Saturday said seven licences will be issued in the current round of bank licensing.

The RBI had last issued licences in 2002, when Kotak Mahindra Bank and Yes Bank were granted licenses.

Following an announcement by the then Finance Minister Pranab Mukherjee, the RBI issued final guidelines on new banks in February this year.

The most notable feature is the decision to allow corporates into the fray, provided they meet proper norms. But Governor Rajan, during his academic days, was vocal in speaking against letting corporates into the banking domain.

Twenty-six entities, including the Tatas, Aditya Birla Group, Anil Ambani-led Reliance Capital and Religare, apart from India Post, applied. Videocon Group, later on withdrew its application.