It is reported that RBI has zeroed in on a panel of 5 eminent members to screen the Banking license applications and provide necessary guidance to the RBI Governor for suitable decision.
Though not confirmed, it is expected that the members chosen for the panel are, Sebi Chairman U K Sinha, insurance regulator Irda Chairman T S Vijayan, pension regulator PFRDA Chairman Yogesh Agarwal, Financial Services Secretary Rajiv Takru and financial sector expert Y H Malegam.
In the last few months there has been some discordant notes struck between the RBI Governor and the Finance Minister. While the Finance Minister stated that there could be no limit to the number of applications that may finally be approved, the news was that RBI Governor had indicated that it would like to limit the number of licenses to 4 or 6. Also with the department of Post itself being an applicant and some of the RBI Directors being involved as promoters of some of the applicant groups, there are serious conflicts of interest that may arise in the context of granting of licences. Given the reputation of the current Government at the center, these conflicts would immediately translate into potential corruption possibilities or at least allegations.
It is therefore necessary for RBI as well as the expert group to make public the considerations adopted for the grant of licenses by placing the recommendation on each of the applicants before the public.