New bank licences: Bimal Jalan panel to finalise report three months after RBI scrutiny

NEW DELHI: Former Reserve Bank of India governor Bimal Jalan, who heads the external committee set up to screen applications for new bank licences, said the panel won't rush the process as the institutions will be dealing with public money.

"We will take a decision which is in our interest, public interest. RBI is doing intensive scrutiny of all the parameters as per the guidelines," he said.

The central bank has given the committee three months after the RBI conducts its own scrutiny. "Time, per se to me, is not that important. Scrutiny of each of the applicants (by RBI) is still in process, because there is lot of work to be done," he said. The RBI is checking the applications of more than 20 entities seeking to set up new banks, including Anil Ambani-led Reliance Capital, Aditya Birla Nuvo, Shriram, Religare and L&T Finance. Tata Sons withdrew its application last month, saying its current financial services operating model best supported the needs of the group.

RBI governor Raghuram Rajan had indicated that the RBI could award licences early next year, taking into consideration the recommendations of the screening committee. The other members of the external committee set up by the RBI include former RBI deputy governor Usha Thorat, former Sebi chief CB Bhave and RBI board member Nachiket Mor. Jalan's observation came a day after Parliament's standing committee on finance headed by Yashwant Sinha suggested that the RBI should not grant new banking licences to companies since the banking business is highly leveraged and involves public money. The committee had expressed concern that managements may favour their parent groups.

The parliamentary committee had also recommended that the RBI conduct screening and evaluation of applications in a well-defined and transparent manner without leaving any room for speculation or conjecture over the time frame.

On the sidelines of the same event, SBI chairman and managing director Arundhati Bhattacharya said the bank will make a Rs 9,576 crore qualified institutional placement ( QIP) offer this fiscal.

“We have got approvals from both the board and the government. The government will maintain 58% stake in the bank,” she said.