STOCK MARKET BSE NSE

IDFC, Bandhan Get RBI Nod to Operate as Bankers

State-run IDFC Limited, India’s leading integrated infrastructure finance player and Kolkata-based microfinance firm Bandhan Financial Services were on Wednesday granted banking licence by the Reserve Bank of India (RBI).

Published: 03rd April 2014 06:00 AM  |   Last Updated: 03rd April 2014 01:26 AM   |  A+A-

State-run IDFC Limited, India’s leading integrated infrastructure finance player and Kolkata-based microfinance firm Bandhan Financial Services were on Wednesday granted banking licence by the Reserve Bank of India (RBI).

The clearance came a day after the Election Commission granted RBI the permission to go ahead with the issue of new licences.

The two firms will need to comply with the terms and conditions for a full-fledged bank in the next 18 months.

The RBI said IDFC and Bandhan were recommended as suitable for grant of “in-principle” approval by the High-Level Advisory Committee (HLAC) headed by former Governor Bimal Jalan.

RBI governor Raghuram Rajan, while enumerating the mid-term monetary policy on Monday, had said that the government and RBI will work for more licences from now on and licences would be “on-tap.”

The HLAC in its recommendations said that in the case of the Department of Posts, which had applied for a licence, “It would be desirable for the RBI to consider the application separately in consultation with the government.”

The application submitted by Department of Post has now been recommended to a high-level screening committee for further action and consultation with the Government.

Besides India Post, the other applicants included state-run IFCI and private sector Anil Ambani group and Aditya Birla group, Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital.

According to reports, RBI originally received 27 applications in July 2013, after which Tata Sons and Videocon Group withdrew, leaving 25 contenders in the fray.

Following the in-principle clearance to these two entities, Secretary Financial Services, GS Sandhu said, “It will pave way for more entities to come forward and spread financial inclusion. It augurs well for the economy and banking sector.”

At present, India has 27 public sector banks and 22 private sector banks in the country.

The RBI has issued bank licences after a gap of a decade. It last awarded licences to Kotak Mahindra Bank and Yes Bank in 2003-04.

The central bank, however, clarified that “until a regular licence is issued, the applicants would be barred from doing banking business.”

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp