The Reserve Bank on Thursday favoured liberalisation of bank licensing policies which otherwise could hinder entrance of new players and have an adverse impact on the economy and consumers.
“Regulators need to ensure that their regulatory stance does not create barriers to the entry or exit of institutions or result in unwarranted costs to the economy and consumers. Instead regulation should impose restrictions on institutions is such a way that it does not cause a moral hazard problem,” the Reserve Bank of India said in its annual ‘Trends and Progress of Banking in 2012-13’ report.
The RBI is in the process of issuing new banking licences. It has received as many as 26 applications is likely to issue new licences in January 2014.
Meanwhile, the report also noted that the total number of automated teller machines (ATMs) across the country crossed the one lakh threshold in 2012-13.
ATMs clocked double digit growth at 1,14, 014 during the year, driven primarily by private sector banks, with their share in total ATMs picking up rapidly to about 38 per cent.
The report notes that ATMs were an innovative means to provide basic banking services to customers in a faster and cost-efficient manner, especially off-site ATMs since they operate without the paraphernalia of a bank branch. According to the report, off-site ATMs accounted for more than half the total ATMs in the country.
The RBI is confident that off-site ATMs will continue to play a significant role in extending banking services across the country. With the policy initiative to enable non-bank entities to set up and operate ATMs – also known as White Label ATMs – underway, the central bank expects the proportion of off-site ATMs will grow further. So far, of the 18 entities that have approached RBI for setting up White Lable ATMs, 12 have been granted in principle authorisation and one has also been issued the certificate of authorisation and is operating since June 2013, in Chandrapada (Tier V town) in Thane district, Maharashtra.