New licenses for banks introducing differentiated banking models: Chidambaram (Amended)

Finance Minister P. Chidambaram on Friday said the government is examining the option of handing out new banking licenses from January 2014 to applicants who come up with differentiated banking models.

Addressing the 34th Bankers Conference (BANCON 2013) here, Chidambaram said: "Most banks are clones of each other rather than differentiated. Differentiated banking licenses are important. I am hoping that when banking license is issued in January 2014, new licenses will go to new segments with innovative banking models."

Chidambaram said the next challenge for the banking industry was to improve the quality of banking and the quality of banking products, and make them more customer centric.

He urged banks to meet those requirements, and raise the level of retail credit from the current position of nine per cent.

Chidambaram also assured the Current Account Deficit (CAD) will be contained this fiscal to below 56 billion dollars.

On economic growth, Chidambaram said he expected it to improve in the second half of the current fiscal, and predicted economic growth to be between 5-5 and 5 per cent in 2013-14.

Chidambaram assured that he will do whatever it takes to contain fiscal deficit at 4.8 per cent of GDP in 2014.