DIFFERENTIATED BANKING LICENCE- RaghuramRajan pitches for differentiated bank licences

RaghuramRajan differentiated bank licences - RaghuramRajan supports for differentiated bank licences

The differentiated banking licence are more appropriate for some private entities aspiring to setup banks in India before granting in principle approvals for banking licence to two companies , Bndhan Financial  Services and IDFC. The banking regulator RBI has assessed various  applications.

RBI felt comfortable  with the Bimal Jalan committee .RBI opened up the possibility that will allow applicants to apply again ,  once they start giving licence on tap , as well as create differentiated banking licence.some of the applicants will be better off applying for differentiated licences rather than full licence as per version of Mr Rajan Governor  RBI.

Reserve Bank of India is going to offer only two New licences after a gap of a decade , due to public governess it considered this the most appropriate stance.

Several large industrial houses  Aditya Birla Group ,Reliance and bajaj Group and finance companies Shri Ram Capital ,L&T finance holding,Muthoot Finance had applied for a banking Licence.

Some of the entities that did not qualify for a full fledged banking licence in this round could re apply in the future.  In a discussion paper on India's Banking structure (released in Aug 2013) the banking regulator has said banks had shown significant progress in financial inclusion and in improving the  quality of risk management but added a lot more needs to be done.Mr Rajan added that RBI opened  up the possibility that will allow applicants to apply again, once they start giving the licence.