Paper on new bank licences by Aug: Subbarao

The Reserve Bank of India (RBI) today said it will come up with a discussion paper on granting banking licence to private sector players and NBFCs by the first week of August.

"The discussion paper is on track. We expect to come out by end of this month or first week of August," RBI Governor D Subbarao told reporters after announcing the first quarterly review of the monetary policy here today.

Finance Minister Pranab Mukherjee had announced in the Budget that RBI might issue fresh banking licences to private sector players and non-banking finance companies (NBFCs).

Under the current guidelines, a new private sector bank should have a minimum networth of Rs 300 crore and no single entity or group of related entities can hold more than 10 per cent in a bank.

"There has been a number of issues that has come up as to what should be the entry level capital, promoters' capital, norms for corporates and NBFCs," Subbarao said.

Business houses including the Anil Ambani Group, the AV Birla Group, Bajaj Auto and Religare among others have evinced interest in acquiring banking licence. NBFCs like Shriram Group and Srei are also keen on entering the banking space.