Finally, India is on its way to hosting a differentiated set of banks, each of which will perform a set of pre-determined functions. Central bank Reserve Bank of India (RBI) granted in-principle approval on September 16 to 10 entities for launching a “small bank”. In August, it approved 11 institutions for activating “payments banks”. In 2014, RBI had granted approval to two private sector organisations for launching “universal banks”.
These “in-principle” approvals will be converted into licences after 18 months from grant of approval once the regulator is satisfied that the institution has met all conditions.
So far, so good. But a few issues need clarity.
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