Money & Banking

Final norms on new bank licences to take more time

PTI New Delhi | Updated on March 21, 2011

Corporates looking to enter the banking business will have to wait for some more time, as the Government is considering amendment of the Banking Regulation Act and Banking Laws Act before finalising the guidelines for giving new licences.

The final guidelines on the new banking licences would be released only after the necessary amendments to the Banking Regulation Act and Banking Laws Act are cleared by Parliament, official sources said.

However, the draft guideline for the new banking licences would be out by the end of this month for public comments, sources added.

Sources added that empowering the RBI is essential for obtaining information about the other businesses of corporate houses seeking banking licences in order to protect depositors’ interests.

The Government, sources said, is considering amendment of the Banking Regulation Act to expand the powers of the RBI so that it can seek information from entities involved in the insurance and asset management business, in addition to banks.

Sources said this is relevant, as the risks of companies involved in businesses such as insurance and asset management may sneak into the banks’ account books by virtue of the same parentage, sources said.

The Banking Regulation Amendment Bill is likely to be tabled in the Monsoon Session of Parliament.

Currently, insurance companies are regulated by the Insurance Regulatory and Development Authority and the asset management business comes under the purview of SEBI.

Published on March 21, 2011

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