RBI approval follows Prime Minister Narendra Modi's commitment that India would expedite procedures to allow the BoC to set up branches in India.
Bandhan Bank files for Rs 2,500 cr IPO: Charting the institution's growth from a micro lender to bank
In April 2014, Bandhan was one of the two entities, another was IDFC, that won banking licence from the RBI defeating big companies in the fray
Here is a low down on the latest development
IDFC and Bandhan Financial Services Pvt Ltd emerged successful out of 25 contenders for new bank licences
Having forced to quit SKS Microfinance, which he founded, three years ago, Vikram Akula has returned to the financial inclusion space by buying 26 percent stake in a start-up Vaya Finserv, which is also eyeing small bank licence.<br />
These banks are expected to bring in a large chunk of the public, especially in rural areas and other places with low penetration, into the formal banking system
The Reserve Bank of India (RBI) will issue the guidelines that will be used to grant on-tap and differentiated banking licences later this year, deputy governor R. Gandhi told reporters on the sidelines of an event on Friday.
The Reserve Bank of India (RBI) said on Monday it had received 26 applications for new bank licences, with Tata Sons Ltd, the holding company for India's largest conglomerate, among those seeking to set up the first new Indian banks since 2004. In February, the RBI released guidelines to allow corporate houses to form banks, part of an effort to expand access to financial services in a country where only about half the population has a bank account. Licence winners are expected to be announced by the first quarter of 2014.
Airbus Group pressed ahead with post-Lehman plans to acquire its own banking licence on Friday, saying it would buy small German lender Salzburg Muenchen Bank AG to boost its financing options.
The reason for the Tatas withdrawing the application for a banking license can be best explained through a line that Walter Bagehot, the great editor of The Economist wrote in his 1873 classic Lombard Street: A Description of the Money Market. As Bagehot wrote "the main source of profitableness of established banking is the smallness of requisite capital."
The withdrawal implies that RBI's conditions were restrictive and complying with them would have affected the conglomerate's other businesses.
Tata Group and firms controlled by billionaires Anil Ambani and Kumar Mangalam Birla are among those which applied for bank licences.
Tata Sons, LIC Housing Finance, Aditya Birla Nuvo, Department of Posts, Reliance Capital and Bajaj Finserv are among the 26 private and pubic sector entities which have applied to RBI for grant of bank licences.
The decision to surrender the banking licence in India is in line with the group's global strategy of conserving capital and wind up its capital intensive businesses
The Reserve Bank will shortly come out with its clarifications on issuing licences for more private sector banks, the Finance Ministry said today.<br /><br />
B K Modi promoted Spice Global is planning to apply to RBI for a bank licence for which guidelines were issued last month.
Opponents of the new measures worry the reform, driven by the finance ministry, could backfire if risky loans from one branch of a company to another go bad and trigger a broader crisis.
In March 2012, it received the licence to set up a bank in the country.