Mumbai, Oct. 4: The Reserve Bank of India today named three more members to the committee headed by Bimal Jalan that will vet applications for new bank licences.
They are Usha Thorat, former deputy governor of the RBI, C.B. Bhave, former chairman of the Securities and Exchange Board of India, and Nachiket Mor, who is now on the board of the RBI. Jalan, who heads the panel, is a former RBI governor.
RBI governor Raghuram Rajan made the announcement after the central bank’s board meeting in Raipur today. He said the names of the entities that had won the new bank licences might be announced by January.
“We have set up the committee under Bimal Jalan for bank licences. Let me announce the other members of the committee. They will be Usha Thorat, Chandu Bhave and Nachiket Mor who is on the RBI board right now. We will try our best to complete the process by January 2014,” Rajan said at a news conference after a board meeting.
The panel will make its recommendations to the governor and deputy governors, who will place the final proposal before the committee of the RBI central board. The RBI chief here added that the central bank would take a call on whether to allow industry houses to enter the banking sector from which they have been barred till now.
There are 26 applicants from the public and private sector for bank licences, including Tata Sons, India’s biggest business group, and firms controlled by billionaires Anil Ambani and Kumar Mangalam Birla. Among public sector units, India Post and IFCI have submitted applications.
In the past 20 years, the RBI has licensed 12 banks in the private sector in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993.
Kotak Mahindra Bank and Yes Bank were the last two entities to get licences in 2003-04.
The process to hand out licences comes after a hiatus of almost a decade.
When Rajan took charge as the 23rd governor of the RBI last month, he had said an external committee headed by Jalan would screen applications for licences.
Recently, Jalan had said the panel would look into new applications once the RBI completed the basic scrutiny of the 26 applications that had already been received. “Work is still in progress. The Reserve Bank has received applications. It is doing the first round of scrutiny. Then, we will see how to go about it,” Jalan had then said.
Responding to a query on the appointment of Mor, who is on the RBI’s central board of directors, Rajan said since he was not an employee of the apex bank, he could be appointed in the expert panel. Incidentally, Mor heads a 13-member committee, which will frame a “clear and detailed” vision for financial inclusion and deepening banking services across the country. Other members of the committee include Vikram Pandit, former chief executive of Citibank, and Axis Bank CEO Shikha Sharma.
Asked to comment on the controversial report of the committee for evolving a composite development index of states that had ranked Narendra Modi’s Gujarat among the less developed states, Rajan, who headed the panel, said the committee was apolitical and that the objective was to arrive at a conclusion using certain parameters such as low literacy and high infant mortality.
He added that the committee also took the development parameter in terms of the size of SC/ST population in a state as a higher level of population in the category points towards issues of deprivation, which is an issue in certain states.