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Bimal Jalan submits report on bank licences

KR Srivats
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Bimal Jalan
Bimal Jalan

India has moved a step closer to issuing fresh bank licences, after a high-level advisory committee headed by former Reserve Bank of India (RBI) Governor Bimal Jalan submitted its recommendations to the central bank here on Tuesday.

Indications are that bank licences will be awarded in phases this time around.

Background check

The Jalan panel, which scrutinised 25 applications, is understood to have completed the background verification of all the applicants and recommended a roadmap to award licences to the eligible entities.

The advisory panel, appointed by the RBI, had begun evaluating the applications at its first meeting on November 1, 2013.

The RBI had initially received 27 applications but Tata Sons and Videocon Group’s Value Industries Ltd withdrew later.

KC Land & Finance was subsequently added to the list of applicants.

4-hour meeting

“Yes, yes..,” was Jalan’s response to Business Line when he was asked if the panel’s recommendations had been submitted to the RBI, after a nearly four-hour-long meeting.

He, however, declined to give details. The final call on who will make the cut is expected to be taken by RBI Governor Raghuram Rajan after consultations within the central bank and also with Finance Minister P Chidambaram.

The Finance Minister may hold a meeting on the Jalan panel’s recommendations on March 10.

The Election Commission’s Code of Conduct will have no bearing on the process of awarding of bank licences, official sources said.

The entire process of giving in-principle approval for the bank licences may get completed by end March.

The four-member Jalan panel looked into the reports of all government agencies, including the Central Bureau of Investigation.

The frontrunners

There is a good mix of public and private sector aspirants in the fray.

The frontrunners for the first phase are LIC Housing Finance, L&T Finance and IDFC.

Anil Ambani Group, Aditya Birla Group, Religare Enterprises, Shriram Capital and Muthoot Finance are the other major groups in the running.

State-owned India Post and IFCI are also in the race for a bank licence, sources said.

In the past two decades, the RBI had licensed 12 banks in the private sector in two phases.

Ten banks were licensed on the basis of guidelines issued in January 1993. Kotak Mahindra Bank and YES Bank were the last two entities to get banking licences, in 2003-04.

RBI board meeting

The Central Board of the RBI is scheduled to meet in New Delhi on March 7.

This will be a regular post-Budget meeting of the RBI Board and not meant for discussions on the Bimal Jalan panel recommendations, sources said.

The Finance Minister will address this meeting.

srivats.kr@thehindu.co.in

(This article was published on February 25, 2014)
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Union Budget 2014-15 Highlights

  • Following are the highlights of the Union Budget 2014-15 presented by Finance Minister Arun Jaitley in Parliament on July 10, 2014
  • Income-tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3 lakh
  • Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs 1 lakh.
  • Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh
  • Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5 lakh.
  • Committee to look into all fresh tax demands for indirect transfer of assets in wake of retrospective tax amendments of 2012
  • Fiscal deficit target retained at 4.1% of GDP for current fiscal and 3.6% in FY 16
  • Rs 150 crore allocated for increasing safety of women in large cities
  • LCD, LED TV become cheaper
  • Cigarettes, pan masala, tobacco, aerated drinks become costlier
  • 5 IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
  • 5 more IITs in Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
  • 4 more AIIMS like institutions to come up in AP, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP
  • Govt proposes to launch Digital India’ programme to ensure broad band connectivity at village level
  • National Rural Internet and Technology Mission for services in villages and schools, training in IT skills proposed
  • Rs 100 cr scheme to support about 600 new and existing Community Radio Stations
  • Rs 100 cr for metro projects in Lucknow and Ahmedabad
  • Govt expects Rs 9.77 lakh crore revenue crore from taxes
  • Govt’s plan expenditure pegged at Rs 5.75 lakh crore and non-Plan at Rs 12.19 lakh crore.
  • Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called ‘Namami Gange’
  • Kisan Vikas Patra to be reintroduced, National Savings Certificate with insurance cover to be launched
  • FDI limit to be hiked to 49% pc in defence, insurance
  • Disinvestment target fixed at Rs 58,425 crore
  • Gross borrowings pegged at Rs 6 lakh crore
  • Contours of GST to be finalised this fiscal; Govt to look into DTC proposal.
  • ‘Pandit Madan Mohan Malviya New Teachers Training Programme’ launched with initial sum of Rs 500 crore
  • Govt provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants
  • Set aside Rs 11,200 crore for PSU banks capitalisation
  • Govt in favour of consolidation of PSU banks
  • Govt considering giving greater autonomy to PSU banks while making them accountable
  • Rs 7,060 crore for setting up 100 Smart Cities
  • A project on the river Ganga called ‘Jal Marg Vikas’ for inland waterways between Allahabad and Haldia; Rs 4,200 crore set aside for the purpose.
  • Govt proposes Ultra Modern Super Critical Coal Based Thermal Power Technology
  • Expenditure management commission to be setup; will look into food and fertilizer subsides
  • Impasse in coal sector will be resolved; coal will be provided to power plants already commissioned or to be commissioned by March 2015
  • Long term capial gains tax for mutual funds doubled to 20%; lock-in period increased to 3 years
  • Rs 4,000 cr set aside to increase flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.
  • EPFO to launch the ‘Uniform Account Number’ service to facilitate portability of Provident Fund accounts
  • Mandatory wage ceiling of subscription to EPS (Employee Pension Scheme) raised from Rs 6,500 to Rs 15,000
  • Minimum pension increased to Rs 1,000 per month
  • Union Budget 2014: List of products getting cheaper/ costlier

  • Finance Minister Arun Jaitley today spared the common man from price hikes by keeping duties on commonly used day-to-day items unchanged but made it costlier for smokers and tobacco consumers with a steep increase in excise rate in tax proposals in Budget 2014—15.
  • Following is a list of what will be cheaper and costlier:
  • YOU WILL PAY LESS FOR
  • CRT television
  • LED/LCD TVs especially below 19 inch
  • Footwear priced between Rs 500 to Rs 1,000 per pair
  • Soaps
  • E—book readers
  • Desktop, laptops and tablets
  • RO based water purifiers
  • LED Lights, fixtures and lamps
  • Pre forms of precious and semi—precious stones
  • Sports Gloves
  • Branded petrol
  • Matchbox
  • Life micro insurance policies
  • HIV/AIDS drugs and diagnostic kits
  • DDT insecticides
  • YOU WILL PAY MORE FOR
  • Cigarettes
  • Aerated drinks with sugar
  • Pan masala
  • Gutka and chewing tobacco
  • Jarda scented tobacco
  • Radio Taxi
  • Imported electronic products
  • Portable X—ray machines
  • Half cut/broken diamonds.

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