RBI to speed up process for issuance of banking licences

RBI to speed up process for issuance of banking licences Mumbai: A day after Lok Sabha passed the Banking Laws (Amendment) Bill, RBI Deputy Governor K C Chakrabarty Wednesday said the process for issuing new banking licences will be expedited.

"The process will be expedited... I don't think, it should take much time," Chakrabarty told reporters on the sidelines of an event organised by IDBI Bank here.

He, however, didn't give a timeframe.

Referring to issuing of licences to corporates, the deputy governor said first the guidelines on banking licences should be in place.

On Tuesday, Lok Sabha passed the Banking Laws (Amendment) Bill, 2011.

Among other things, the bill seeks to raise the voting rights of retail/minority investors in private sector banks to 26 percent from 10 percent.

The Bill also allows RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in public sector banks to 10 percent from the present 1 percent.

Changes brought by the new Bill will enable RBI to issue new banking licences.

Replying to a question whether the RBI is comfortable with the fact that Competition Commission of India (CCI) will regulate mergers and acquisitions in banking space, Chakrabarty said, "This law is approved by the Parliament and in a parliamentary democracy, what Parliament says is supreme. So, I can't say as an institution that I am uncomfortable."

PTI