Responding to the Reserve Bank of India's New Bank Licensing Policy, 26 applications have been filed by different entities, which are in the fray to float Banks.
Three Government organisations viz., India Posts, Tourism Finance Corporation of India and LIC Housing Finance figured in the list.
Branded companies that have sought permission to open banks included Aditya Birla Nuvo, L & T Finance Holdings, TATA Sons, Bajaj Finserv, Shriram Capital.
Non-banking finance companies which have applied for bank license included IDFC, Edelweiss Financial, Muthoot Finance, Reliance Capital, J M Financials and Religare Enterprises.
Few others like Magma Fincorp, SREI Infrastructure, IFCI, Indiabulls Housing Finance, J M Financial Services, are also in the fray.
Dr K C Chakrabarty, Deputy Governor, Reserve Bank of India has said that a provisional list of applicants who are eligible to get a licence will be decided in January 2014. New banks will take at least two years to come, he added.
The Government's move to provide banking license to private and industrial houses will only heighten the ongoing stern competition. In its eagerness and bid to allow private players, the RBI should ensure that only those corporate houses that meet proper norms and with clean financials are considered. RBI should also stipulate, monitor and ensure opening of branches by the new entities in unbanked centres
The rules, style and modalities of business might change. Besides business, the first potential foreseeable threat for the Public Sector Banks is to ward off poaching of our young Officers by these new entities.
It is hoped that the IBA and the Government will recognize this risk and work out an attractive pay package during the ongoing Bipartite Settlement and save the banks from facing the peril of attrition. Individual banks also have to do their bit by extending benefits to Officers that do not come under the purview of Bipartite Settlement.