Pranab offers incentive for private banks - India News and Travel Times Provides India-centric and other News and Features

Union Finance Minister Pranab Mukherjee on Friday announced that the Reserve Bank of India (RBI) is considering new bank licenses to promoters in the private sector and also Non Banking Financial Companies (NBFC) if they meet its eligibility criteria. The market experts feel that if such a move happens then that would be the first time post 2002 that RBI would look at such a move. In 2002, the RBI had granted an "in-principle" approval to Kotak Mahindra Finance Ltd (KMFL) and three Indian finance professionals who had teamed up with Rabo India to set a up commercial bank- the Yes Bank. Indian corporate bigwigs like Tata, Birla group, and some of the older Non-Banking Financial Companies (NBFC) have expressed their interest in a banking license. Among finance companies, Reliance Capital and India bulls have already announced their interest in getting into banking sector. Lenders such as the Exim Bank and Small Industries Development Bank of India (SIDBI) were also interested in a banking license.