Chidambaram hopes new bank licences would be issued before March 2014

Finance Minister P. Chidambaram on Thursday hoped that some new bank licences would be issued before March 2014.

"RBI has released guidelines for licencing of new banks and I hope that some banks will be licenced before the end of the financial year," Chidambaram said at the Annual General Meeting (AGM) of the Indian Banks' Association here.

"We need more banks, we need more branches. We need them in the small towns, in the block headquarters, and the backward regions of the country especially the North Eastern states and the hill states," he said, adding that this will all lead to greater financial inclusion.

"I am happy that more branches will be opened in 2013-14 than ever before. Banking access to the people have improved. In 2010-11, each branch served 13,300, in 2012-13 this number came down to 12,300," he said.

The Reserve Bank of India (RBI) issued comprehensive guidelines for new bank licences in February this year, fixing the last date for filing application by interested entities by July 1.

Earlier this week, the RBI issued clarifications making it more stringent for getting a new bank licence even as it allowed the aspirants to have the holding and capital structure of the bank-holding company in place within 18 months of getting the in-principle nod, instead of 12 months prescribed earlier.

RBI also said aspirants from the NFBC/insurance space will have to get the go-ahead from their concerned regulators like Sebi and Irda and that their views on the same will prevail over the RBI's own views on the proposed non-operative financial holding company (NOFHC).

On the holding and capital structure of NOFHC, the RBI said it is not necessary that an individual along with his related parties has shareholding in the holding company.