Non-banking finance companies (NBFCs) have the advantage over other applicants for banking licences as they already have good customer base, Reserve Bank of India Deputy Governor K. C. Chakrabarty said here on Wednesday.

“NBFCs have one advantage that they have customer base. If they get the licence, they can convert themselves into banks,” he said when asked whether NBFCs will get a priority in terms of bank licences.

“But how it will be done, what are the other factors, I don’t know because a separate committee has been appointed (to award licences),” he added after inaugurating Kotak Mahindra Bank’s 500th branch here.

The RBI has received 26 applications for new banking licence from corporates such as Tata Group, Aditya Birla, Anil Ambani’s Reliance Group and Bajaj Group apart from India Post. Around a dozen NBFCs are also in the race.

Last week Governor Raghuram Rajan appointean external committee which will screen the list of applicants. On banks offering loans to credit cardholders while purchasing goods or services, the Deputy Governor said, “There is no ban on giving loans on credit cards. Don’t charge 12 per cent actually and claim that I am charging only zero per cent interest.”

“We are not saying you give a loan and say that no EMI has to be paid...absolutely no problem. The only thing is whatever the EMI has to be paid, transparently say, what is the interest rate you are charging,” Dr. Charkrabarty said. He said the timing of the ban on zero per cent interest schemes was perfect as during festival seasons mis-selling remained at peak.

When asked whether credit off-take will pick up since some banks have reduced lending rates on select products, Dr. Chakrabarty said banks were already giving too much loans. “Our problem is that banks are giving too much loans. It is not our concern, the bank which must be able to mobilise the resources,” he said. —PTI