“RBI will come up with the guidelines by the end of this month,” Department of Economic Affairs Secretary R Gopalan told reporters on the sidelines of a CII function in New Delhi on Monday.
He further said the Finance Ministry would have a look at the draft guidelines and comments would be invited before the final guidelines were notified.
In the Budget 2011-12, Finance Minister Pranab Mukherjee had said the RBI plans to issue guidelines for the grant of new banking licences before the close of this financial year.
In the last Budget, it was announced that the Reserve Bank of India would consider giving traditional banking licences to private sector players, he had said.
Following the announcement made by the Finance Minister, the Reserve Bank had brought out a discussion paper in August, 2010, on giving out new banking licenses to business houses and non-banking finance companies, besides regulations for the same to foster greater competition.
The RBI also sought to know “whether industrial and business houses could be allowed to promote banks.”
Furthermore, it sought stakeholders’ views on whether NBFCs should be allowed to convert into or promote banks.
The RBI has received comments on its discussion paper from all stakeholders.
Various entities like Reliance Capital, IndiaBulls, Religare, IL&FS, IDFC, IFCI and Aditya Birla Financial Services are reported to be mulling an entry into the banking space.
At present, India has 26 public sector banks, seven new private sector banks, 15 old private sector banks, 31 foreign banks, 86 regional rural banks, 4 local area banks, 1,721 urban cooperative banks, 31 state cooperative banks and 371 district central cooperative banks.
Infra debt fund guidelines by June: Finance Ministry
The Finance Ministry on Monday said the guidelines for infrastructure debt funds will be announced by June to help the core sector meet its financing requirement, which has been pegged at USD 1 trillion during the 12th Plan period (2012-17).
“We are hoping to get it (guideline for infra debt fund) out by the end of first quarter, by June this year,” Department of Economic Affairs Secretary R Gopalan told reporters on the sidelines of a CII event in New Delhi.
Finance Minister Pranab Mukherjee, in the Budget, announced facilitating the establishment of dedicated infra debt funds through special purpose vehicles for attracting foreign investment in the infrastructure sector.
“To attract foreign funds for financing of infrastructure, I propose to create special vehicles in the form of notified infrastructure debt funds,” Mukherjee had said while presenting the Budget for 2011-12.
According to the Budget Memorandum, the government is aiming at the creation of more than one such debt fund, which will provide low-cost funds from abroad for financing growth of the infrastructure sector.
In June, 2010, an expert panel headed by HDFC Chief Deepak Parekh had recommended setting up such a fund with an initial corpus of Rs 50,000 crore to meet the financial needs of the sector.
Answering queries on the government’s proposal to expand the list of industries that will qualify for infrastructure sector-related benefits, Gopalan added, “We are going to Committee of Secretaries for the infrastructure definition.”
He further said a final decision will be taken after getting their views.
The country’s poor infrastructure, which is seen a major bottleneck for economic growth, requires an investment of a whopping USD 1 trillion in the 12th Plan, beginning 2012 and ending 2017.
Currently, power, road, ports and industrial parks are among some of the segments that have been included in the infrastructure sector.
Retail, real estate and health are the major sectors that are demanding an infrastructure tag.