"Cabinet will clear proposals based on policies announced earlier... no where does it say government functioning should come to a halt," he said.
The Reserve Bank (RBI) is likely to issue a few bank licences during the model code of conduct which came into force from today, Union Finance Minister P Chidambaram announced on Wednesday.
“What does the code of conduct have to do with this [bank licence process]. The government and regulators are discharging their normal duties... They [RBI] wish to issue a few licences,” Mr. Chidambaram told reporters at a press conference. “So that's the indication we have got. We are not interfering with that process, that is the RBI's decision,” he added.
The Minister also clarified that the Cabinet will continue to take decisions right up to the elections in accordance with the model code of conduct rules, which bars the ruling party from acting to alter the level-playing field during elections. “Cabinet will clear proposals based on policies announced earlier...no where does it say government functioning should come to a halt,” he said.
Last month, a panel had submitted shortlisted entities to the RBI. In all, 27 applications were received of which Tata Sons Ltd and Value Industries Ltd withdrew.
Earlier, the Minister reviewed the performance of public sector banks. “The biggest challenge facing the public sector banks is NPAs [non-performing assets] and asset quality,” he said adding that the quantum during 2013-14 is likely to be a little higher then 3.84 per cent last fiscal.
Mr. Chidambaram also said “We have told them to focus on recovery and banks are focusing on recovery.” He said PSU banks recovered Rs. 18,933 crore of bad loans during April-December 2013.
The Minister is scheduled to address the RBI board on Friday.