RBI's New Banking License: Permits Only to High Quality Applications

RBI will accept entries for banking licenses till the first of July and the approved applicants will readily get the license for a period of 12 to 18 months. However, on the renewal of the license, RBI is yet to make any rigid decision.

Regarding opening of the branches, RBI issued a notice that said, “After the in-principle approval is accorded by RBI for setting up a bank, the promoters/promoter group have to set up the NOFHC and the bank within 18 months from the date of in-principle approval and the bank has to commence banking business within this period after obtaining the banking license from RBI...”

The notice also talked about certain conditions that have to be followed by all the licensees. The new banks have to lend money to the farmers, should invest in government bonds and the new branches should be opened in areas, which lack banks at the present time.

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