Bank licences: Poll panel verdict likely next week

Panel discussing either to defer issue till general elections are over or give it a go-ahead with some conditions

The Election Commission on Wednesday postponed until next week a decision on the Reserve Bank of India (RBI)’s proposal to issue new bank licences.

“I think most likely we will take up the issue on Monday,” Election Commissioner H S Brahma said on the sidelines of a Confederation of Indian Industry event. He said as the matter was referred to the Election Commission (EC), its three-member panel was bound to give an order.

The poll panel would decide if it wants RBI’s proposal deferred till the general elections are over or approve it with riders. The EC had raised a red flag on the timing, fearing the issue might help the ruling parties in the Lok Sabha elections. A senior official said: “The conditions for clearing bank licences were discussed as well but it is still in the discussion stage. The full-member EC meeting will now take place on Tuesday and a decision is certain.”

Chief Election Commissioner V S Sampath and commissioners H S Brahma and Nasim Zaidi are scheduled to visit Maharashtra to review election preparedness on Thursday and Friday. On Monday (March 31), Sampath will travel to Ranchi and was expected to return late in the evening. Given this, it is unlikely the commission might announce a verdict on Monday.

Brahma also defended the EC's decision to defer the increase in gas prices. The Centre had moved a proposal before the commission for permission to double the  price from $4.2 per million British thermal units to $8.4 a unit.

The government cannot take major policy decisions without the EC's permission under the model code of conduct. The Lok Sabha elections were announced on March 5, when the code kicked in.

The EC had sought clarifications from RBI last week regarding the timing of the bank licence proposal move. It said if RBI had notified the rules, it should not have waited for the election process to start.