MUMBAI, June 3 India's central bank said on
Monday in a clarification to queries on new bank licences that
the validity of in-principle approval for new banks has been
extended to 18 months from one year.
The Reserve Bank of India (RBI) issued guidelines in
February allowing any type of company to set up a bank in India,
paving the way for a new set of private banks since the
formation of Yes Bank in 2004.
Applicants must take approval from other regulators to bring
in entities regulated by them under the bank holding company,
the RBI said.
The central bank also said applicants must have public
shareholding of at least 51 percent.
For conglomerates, only non-financial services companies and
non-operative financial holding companies will be allowed to
hold shares of the bank holding company.
The central bank's move to issue licences is intended to
increase banking penetration in a country where only about half
of the population has access to banking services. India has
about one-fourth the ratio of branches to adults compared with
(Reporting by Shamik Paul, Swati Pandey and Swati Bhat; Editing
by Prateek Chatterjee)