RBI receives 26 applications for new bank licenses - Angel Broking

RBI received a total of 26 applications for a new bank license till the expiry of deadline yesterday. Applicants include some of India's big corporate groups like Tata (via Tata Sons), Aditya Birla group (via Aditya Birla Nuvo), ADA group (via Reliance Capital), L&T group (via L&T Finance Holdings), Bajaj group (via Bajaj Finserv), Videocon (via Value Industries) and Shriram group (via Shriram Capital). Department of Posts and IFCI also applied for a bank license. Among housing finance companies, LIC and Indiabulls expressed intentions to set up a bank, while Infra financiers like IDFC and SREI Infra, microfinance lenders such as Bandhan and Janalakshmi and Gold loan company Muthoot Finance have also submitted applications for bank license. Diversified financial companies such as Edelweiss, India Infoline, J M Financial and Religare Enterprises and NBFCs such as Magma Fincorp also expressed intentions to set up a bank. Other applicants were INMACS management, Smart Global Ventures, Suryamani Finance Company, Tourism Finance Corporation and UAE Exchange and Financial services.

RBI will now screen the applications for eligibility and then would refer them to a high level advisory committee to be set by RBI (whose composition is yet to be announced, but would comprise of eminent persons with experience in banking, financial sector and other relevant areas). The high level committee would then make recommendations to the RBI. The decision to issue an in-principle approval for setting up of a bank will be taken by the Reserve Bank. Though, RBI has not fixed any timeframe by which it will issue licenses, however, media reports suggest that the finance ministry officials have indicated that the license are likely to be issued by the end of current fiscal.

Source : Equity Bulls

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