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Former Securities and Exchange Board chairman C B Bhave, former RBI deputy governor Usha Thorat and central bank board member Nachiket Mor would assist Bimal Jalan, former RBI governor, to vet the applications. Announcing the names, RBI Governor Raghuram Rajan said the committee was expected to finalise its report by January.
The central bank is conducting the initial screening of the 26 applications. The shortlisted applications would be forwarded to the expert committee headed by Jalan.
“We are trying to get the report finalised by January 2014, before RBI Deputy Governor Anand Sinha retires,” Rajan said. Sinha is in charge of the banking operations and development portfolio, which is handling the bank licence process and is responsible for framing the guidelines.
Earlier, Rajan had said fresh licences would be issued before or immediately after Sinha retired.
On the induction of Mor into the committee despite the fact that he was a board member of RBI, Rajan said: “He is not an employee and, hence, can be appointed in the expert committee.” The committee would act as a bridge between RBI and the outsiders, he said.
On whether companies would be allowed to enter banking, the governor said: “The decision on whether to allow corporates would be taken after the committee submits its recommendations on the issue.”
The RBI governor said the step taken to attract foreign funds had helped.
The twin swap windows, introduced by the central bank to attract foreign inflows to stem the rupee depreciation, had brought about $5.6 billion in less than a month, he said.
Last month, RBI had announced that it would offer a window to banks to swap incremental FCNR(B) deposits, mobilised for at least three years, at a fixed rate of 3.5 per cent for the tenure of the deposit. RBI also increased the overseas borrowing limit of banks from 50 per cent of the unimpaired tier-I capital to 100 per cent. Banks were allowed to swap such borrowings with RBI at a concessional rate of 100 basis points below the prevailing swap rate. Both facilities were available to banks till November 30.
Market participants expect at least $10 billion inflows from these windows. “We don’t know how much inflow can be expected before the facility closes on November 30,” Rajan said at a press briefing after the central bank’s board meeting.
Referring to the issue of growth, the RBI governor said there was no reason to dispute the government’s GDP growth estimate of 5-5.5 per cent for 2013-14. A pick-up in exports and strong agriculture growth would help the government meet its growth estimate, Rajan added.
