New banks: Bimal Jalan to head screening panel; Patel monetary panel

MUMBAI: New RBI Governor Raghuram Rajan today set up a slew of committees to look into the critical areas of functioning like monetary policy making, screening new bank applicants and speed up the financial inclusion drive.

Even as RBI is currently sifting through 26 applications to start bank operations in the country, Rajan in his first press conference here this evening announced an external committee under the chairmanship of former governor Bimal Jalan to screen applicants.

"This committee will screen licence applicants after an initial compilation of applications by the RBI staff," he said, asserting RBI expects to announce the licences by January or soon after.

Similarly, keeping in mind the financial inclusion agenda, Rajan said he will be requesting former ICICI Bank senior executive Nachiket Mor to draw a roadmap and recommend changes.

On the monetary policy front, a subject which has been under intense friction between the RBI and the Finance Ministry, Rajan announced a committee headed by his deputy Urijit Patel to strengthen the framework.

"I have asked Patel to constitute a panel of outside experts and RBI staff and come up with suggestions in three months on what needs to be done to revise and strengthen our monetary policy framework," the second youngest governor of RBI said.

Rajan added that the reports of a number of past committees, including the Financial Sector Regulatory Reforms Commission, will be considered by the Patel committee.

Additionally, on the personal banking front, Rajan also announced a technical committee to examine the feasibility of using encrypted SMS-based fund transfer.