RBI fixes timelines for regulatory approvals

Now, private entities aspiring to set up banks can expect to hear about the status of their applications from the Reserve Bank of India (RBI) in 90 days. The 90-day period for issue of in-principle approval for private bank licences would commence from the day the report of an independent external advisory committee was received, RBI said.

To improve the response time, RBI on Monday fixed schedules for various regulatory approvals, including grant of private bank licences. It also released a citizens' charter for services such as clearing of transactions. The steps are part of implementing the non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC).

“These timelines are indicative. If departments are likely to exceed the timeline, they will revert to the applicant,” the central bank said. In case an applicant didn't get a response within the indicated timeline, it could approach the head of the department, who would convey the status of the application, the reason for delay, request for additional information and state the likely period for disposal of the application, RBI said.

According to the citizens' charter for RBI departments that interact with the public, the deposit accounts department should issue cheque books within 20 minutes, while demand drafts should be issued within an hour. Refinance facility and disbursement of loans should be carried out on the day an application in this regard is received, while clearing should be completed in three days.

Timelines have also been fixed for in-principle approval to banks for initial public offerings, preferential issue of capital and qualified institutional placements (30 days) and authorisation for import of gold and silver (60 days).

According to an FSLRC recommendation, all regulators have to shift to a time-defined approval process, subject to applicable laws, for all permissions, including licences for business and launch of products and services.