The Reserve Bank of India today said it may come out with guidelines on new banking licences in about three months.

“It (framework on new banking licences) may take three months. It all depends on what are the situations and complexities of issues,” RBI Deputy Governor K C Chakrabarty said on the sidelines of an event organised by SKOCH.

Last month, Finance Minister Pranab Mukherjee in his Budget speech had announced that RBI could allow more private sector players to enter into the commercial banking space.

The central bank is considering giving some more banking licences to private sector players, Mukherjee had said.

“Non-banking financial companies could also be considered if they meet the RBI eligibility criteria … We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services,” he said.

When asked if LIC can enter the banking space, he said, “Till the policy is framed, we are open to everything. Once the policy is framed, we are bound by the policy.”

The finance ministry had said the board of state-owned Life Insurance Corporation (LIC) will have to take a call on entering the banking sector. With a market share of over 60 per cent in the life insurance space, LIC has subsidiaries operating in housing finance and mutual funds also.

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June 2021