Finance Minister asks RBI to issue the final guidelines for new banking licenses
The Finance Minister P Chidambaram has asked RBI to finalize the guidelines for issue of new banking licenses and commence accepting applications applications from interested entities.
But, RBI insists on amending the Banking Regulation Act before such a move.
What RBI wants?
- RBI wants that before it issues final guidelines, the overall Banking Laws (Amendment) Bill, 2011 should be passed by the Parliament.
- The Bill seeks to empower the RBI to supersede the boards of directors of banks for a period not exceeding six months, in the interest of depositors or for securing proper management of any banking company.
What Finance Minster (FM) says?
- The Act will indeed be amended, hopefully in the winter session or at most in the Budget session.
- As issuance of the first license would take six to eight months, RBI doesn’t need such powers immediately.
- By the time the license is issued and the bank comes into existence and begins to function, the Act would have been amended
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Month: Current Affairs - November, 2012