The Reserve Bank is understood to have zeroed in on five names for setting up a high-level panel of experts from the banking and financial sector to screen applications of the 26 aspirants for new banking licences.

The final decisions on the names of the members of High Level Advisory Committee (HLAC) would be taken by the new Governor Raghuram G. Rajan, who would assume charge on September 5.

Sources said the names are that of market regulator SEBI Chairman U.K. Sinha, insurance regulator IRDA Chairman T.S. Vijayan, pension regulator PFRDA Chairman Yogesh Agarwal, Financial Services Secretary Rajiv Takru and financial sector expert Y.H. Malegam, sources said.

Mr. Takru and Mr. Malegam are also board members of RBI. Mr. Malegam, an independent director on many boards, is also an external member of Technical Advisory Committee of RBI on monetary policy.

In the 2001 round of guidelines for the new licences, the then-HLAC members were C.G. Somiah, former government auditor CAG, I.G. Patel, former RBI Governor and Dipankar Basu, former head of SBI.

RBI, sources said, is currently screening the prima facie eligibility of the applicants including “fit and proper” criteria and other relevant parameters.

After the screening of the applications by RBI the names will be referred to the high level panel for scrutiny. It will have its own procedures for screening the applications.

The Committee will have the right to call for more information, have discussions with any of the applicants and may seek further clarifications. The Committee will submit its recommendations to RBI for consideration.

However, the decision to issue an in-principle approval for setting up of a bank will be taken by RBI.

In the last 20 years, the RBI licensed 12 banks in the private sector. This happened in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993.

The guidelines were revised in January 2001 based on the experience gained from the functioning of these banks, and fresh applications were invited.

Kotak Mahindra Bank and Yes Bank were the last two entities to get banking licenses from RBI in 2003-04.

Tata Sons, India’s biggest business group, and firms controlled by billionaires Anil Ambani and Kumar Mangalam Birla are among the 26 companies applied for a licence to open banks last month.

Among public sector entities, India Post and IFCI have submitted applications for bank licences. Micro finance institutions like Bandhan Financial Services, Janalakshmi Financial too expressed their intention to set up a bank.

RBI had issued guidelines for ‘Licensing of New Banks in the Private Sector’ on February 22 and came out with clarifications in the first week of June.

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