The Government and RBI will ensure a level playing field for existing banks while allowing entry to new players who will have to operate on a pan-India basis, a senior Finance Ministry official said on Saturday.
“There must be a level playing field for the existing banks also. It (entry of new players) should not be a disadvantage to them. The guidelines will be framed in such a way that it will not be disadvantageous to the existing players,” Financial Services Secretary, R. Gopalan told reporters here.
Announcing the Budget, Finance Minister Pranab Mukherjee had said that the Reserve Bank will consider allowing giving bank licenses to private sector players and NBFCs to enter into the commercial banking space.
Mr. Gopalan, who recently took over as Financial Services Secretary, said the Government decided to allow more players in the banking space with a view to promote healthy competition in the industry and push financial inclusion.
“There are any numbers of unbanked villages. The potential for banking in the country is huge. The government wants additional (banking) footprint and has requested the RBI to consider new players. The apex bank thinks there is a need for it,” Mr. Gopalan said.
He added that fresh licenses would not envisage the parties to set up localised banks, instead they have to operate with a pan-India focus across the country.
Recently, the RBI Deputy Governor K.C. Chakrabarty had said that the apex bank may come out with guidelines on new banking licences in about three months.
