RBI grants in-principle approval to IDFC and Bandhan Financial Services to set up banks

RBI will consider the application of Dept of Post separately in consultation with the Government of India

The Reserve Bank of India (RBI) has decided today to grant "in-principle" approval to two applicants IDFC and Bandhan Financial Services Private, to set up banks under the Guidelines on Licensing of New Banks in the Private Sector issued on 22 February 2013 (Guidelines).

These two applicants were also recommended as suitable for grant of "in-principle" approval by the High Level Advisory Committee (HLAC) set up by the RBI.

The HLAC had also recommended that in the case of Department of Posts which has applied for licence, it would be desirable for the RBI to consider the application separately in consultation with the Government of India. The RBI has accepted the recommendation of the HLAC.

The "in-principle" approval granted will be valid for a period of 18 months during which the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the RBI.

On being satisfied that the applicants have complied with the requisite conditions laid down by the RBI as part of "in-principle" approval, they would be considered for grant of a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular licence is issued, the applicants would be barred from doing banking business.

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