The Reserve Bank of India (RBI) would soon come out with policy guidelines for differentiated banking licences.

The new licences for banking operations including differentiated ones would be given “on tap” basis, R Gandhi, Deputy Governor of the Central bank said.

“We are currently working on the guidelines. Once we are done, we’ll take feedback and then the final announcement will be made,” Gandhi said on the sidelines of ICC Banking Summit.

“The new guidelines on different types of banks – universal, differentiated, etc – will be issued shortly. After these guidelines are issued...we intend to offer licences on tap,” he added.

Differentiated licences are those that come with restrictions on geographical reach or products offered by a new bank; and these include niche ones like retail banks or payments banks.

According to the Deputy Governor there was need for more variety of banks in the country. The RBI had recently granted banking licences to micro-finance institution, Bandhan; and development finance organisation, IDFC.

Separately, on subsidiarisation of foreign banks, Gandhi said RBI will allow more time to foreign lenders before making the conversion of their India branches into subsidiaries mandatory.

“It is a new proposition. Let us wait for some more time,” he said without detailing further.

Stressed Assets

The Apex bank, he said, remained concerned about the bad loans scenario of banks.

“The NPAs (non—performing assets) are always a concern... Our focus remains on stressed assets too since prevention is better than cure,” Gandhi said.

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