After gas price, EC may force govt to defer bank licences too

Just a day after the Election Commission of India asked the Union petroleum ministry to defer notification of new gas prices, they hinted that issuing of bank licences may be delayed too.

The Election Commissioner told CNBC-TV18 that they are yet to take a final call on the issue of bank licence.

The EC has reportedly raised legal and ethical issues on the banking licence matter.

“Government should have taken decision on bank licence issue earlier,” the EC told CNBC-TV18 in an exclusive interview.

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The fate of new private bank licences was to be decided today by the EC.

The government is keen that the RBI issue some licences before the end of the tenure of the current dispensation.

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However, it seems that the EC is unlikely to clear the proposal. “Govt has said that the banking licence process is on since 2011. If it has been delayed for so long, why not wait for two more months?,’ the EC asked.

The argument of the government as well as the RBI is that the licence issue was something decided by the RBI, with the government having no say in the matter. However, RBI Governor Raghuram Rajan decided to play it safe and sought EC clearance for licences.

The Election Commission told CNBC-TV18 that they are not an expert on economy related affairs, but emphasised on the model code of conduct that 120 parties have agreed to sign on to.

The EC said that they do not want to disrupt or raise hurdles regarding government process. However, they pointed out that they cannot allow any new or non-budgeted events during elections.

“Need to ensure that no party gets extra mileage,” the EC said.