Bandhan Microfinance and IDFC are likely to get bank licenses after the Election Commission gave the green signal to RBI to announce new entrants in the sector, ending weeks of uncertainty over the crucial reform measure.
The RBI and the government had initially set a deadline of issuing new licences by the end of March.
The RBI was competent to take its own decisions and the commission agreed that the ongoing polls need not delay its functions as a banking regulator. The granting of new bank licences is not linked to politics and that the process is "purely economic and regulatory".
The RBI had approached the EC on March 12, nearly a week after polls were announced, seeking its "guidance" on whether it was appropriate for the central bank to announce approvals for banking licences in view of the model code of conduct. The EC sought clarifications from the RBI regarding the urgency of announcing new licences in the midst of the polling process, and agreed to give the go-ahead.
The RBI received 27 applications, which include from public sector and from the private sector.
Market participants expect the central bank would play it safe and issue only a handful of licences as against more than two dozen applications. IDFC, L&T Finance and LIC Housing are seen as frontrunners because they do not have private promoters.
Although India Post was also seen as a strong candidate earlier, its chances of getting a licence appear dim considering that it is in deficit and will have to seek funds from the government.
About IDFC:
Incorporated in Jan 1997 under the recommendations of Rakesh Mohan panel on commercialization of infrastrucutre projects.
For FY13 -
Total Income - Rs.8,148cr
Net Profit - Rs.836cr
Employees - 500+
About Bandhan Micofin:
Founded in 2001 in Kolkata to provide finance to women
Presence in - 22 states & UTs
Branches - 2,016
Borrowers -52.33 lakh
Loans disbursed in Feb - Rs.963cr
Employees - 2,961
The RBI and the government had initially set a deadline of issuing new licences by the end of March.
The RBI was competent to take its own decisions and the commission agreed that the ongoing polls need not delay its functions as a banking regulator. The granting of new bank licences is not linked to politics and that the process is "purely economic and regulatory".
The RBI had approached the EC on March 12, nearly a week after polls were announced, seeking its "guidance" on whether it was appropriate for the central bank to announce approvals for banking licences in view of the model code of conduct. The EC sought clarifications from the RBI regarding the urgency of announcing new licences in the midst of the polling process, and agreed to give the go-ahead.
The RBI received 27 applications, which include from public sector and from the private sector.
Market participants expect the central bank would play it safe and issue only a handful of licences as against more than two dozen applications. IDFC, L&T Finance and LIC Housing are seen as frontrunners because they do not have private promoters.
Although India Post was also seen as a strong candidate earlier, its chances of getting a licence appear dim considering that it is in deficit and will have to seek funds from the government.
About IDFC:
Incorporated in Jan 1997 under the recommendations of Rakesh Mohan panel on commercialization of infrastrucutre projects.
For FY13 -
Total Income - Rs.8,148cr
Net Profit - Rs.836cr
Employees - 500+
About Bandhan Micofin:
Founded in 2001 in Kolkata to provide finance to women
Presence in - 22 states & UTs
Branches - 2,016
Borrowers -52.33 lakh
Loans disbursed in Feb - Rs.963cr
Employees - 2,961
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