India Post and IDFC
have emerged as front runners to receive new banking licences on the back of
their strong distribution networks and credible records.
The committee led by former Reserve Bank of India governor Bimal Jalan, which submitted its report to the central bank last week, is of the view that these two applicants are ready to foray into banking services, a source who did not wish to be identified said.
The
report contains the names of all eligible applicants wishing to set up banks.
The committee began assessing applications at its first meeting on November 1.
"While
the report is yet to be looked into, there is a high chance of giving licences
to India Post and IDFC due to their large existing network," the source
said, without divulging details.
The
central bank will hold a meeting with finance minister P Chidambaram in the
next 10 days to discuss the issue. The final names are likely to be announced
by month-end.
India
Post, being a government body, technically needs Cabinet approval to set up a
bank. The interim budget unveiled by finance minister P Chidambaram recently
did not earmark any funds for the postal department or mention the proposal in
the budget. However, in case its name gets cleared, the formal proposal can be
sent to the Cabinet for approval at a later stage or to a new government taking
office after elections expected in April-May.
A
full budget expected to be presented by the new government in July-August is
likely to contain a detailed provision to help India Post set up a bank.
India
Post has a nationwide network of 155,000 post offices and already has
experience in administering a savings bank scheme, selling tax-saving
instruments and accepting PPF deposits.
IDFC
has been involved in infrastructure funding, asset management (mutual fund) and
private equity services, which are closely linked to banking.
"I
am trying that Post Office should get a banking licence to serve the common man
in rural areas. I will keep by struggle on for banking licence,"
communications minister Kapil Sibal had said recently.
The
RBI received as many as 27 applications but Tata Sons Ltd and Videocon Group's
Value Industries Ltd later withdrew themselves from the race.
Besides
India Post and IDFC, IFCI, Anil Ambani's Reliance Group, Aditya Birla Group,
L&T Finance Holdings and Muthoot Finance, are also in the race to set up
new banks.
Source
: http://www.hindustantimes.com/
