If something attached to the past is not very savory then don't be surprised: Takru

Banking aspirants with an inglorious past are unlikely to get a licence from the Reserve Bank of India for a foray into the sector.

Past business record will be factored in for banking aspirants as scrutiny will be strict, financial services secretary Rajiv Takru told Business Standard. Internal scrutiny of RBI is underway and the next phase of external scrutiny is expected to begin soon.

The statement from Takru comes at a time when the scrutiny is underway and this can give a major jolt to some of the aspirants who have applied for a licence.

Speaking to Business Standard, Takru said, 'The point is, if he/she has got something in his track record which is not very good, that will show when the diligence is done. Whoever it is, if he or she has attached something of the past then everything will come out, the scrutiny will be total,' he said.

The level of intent is evident, as Takru added, 'If something attached to the past is not very savory then don't be surprised.'

It is not only the past record but businesses having link to market developments too will come under scrutiny.

'I mean a fellow who is involved in a business which is basically risky and subject to market fluctuation and so on, I don't think, is going to fit in the 'fit and proper' criteria for a bank ,' he added.

When asked about the rising clamour on 'fit and proper' criteria the financial services secretary said everything could not be converted into numbers and aspirants were well aware of what it actually means.

'Fit and proper is grey but all of us know what it means, but both of us know what it means. Some things are left best undefined, everything can’t be converted into numbers,' added Takru.

According to him, there was no decision being made as to how many licences would be handed out eventually. 'If there are a large number of people who are eligible, then the question of selecting the best would come,' he added.