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RBI supports liberalisation of bank licensing norms

RBI is in the process of issuing new banking licenses. It has received as many as 26 applications for bank licences on the close on July 1.

November 22, 2013 3:03 IST | India Infoline News Service
The Reserve Bank of India on Thursday supported liberalisation of bank licensing policies.


“Regulators need to ensure that their regulatory stance does not create barriers to the entry or exit of institutions or result in unwarranted costs to the economy and consumers,” the RBI said in its annual ‘Trends and Progress of banking in 2012-13’ report.


“Instead regulation should impose restrictions on institutions is such a way that it does not cause a moral hazard problem,” the report said.


“However, this is not to undermine the need for ensuring sufficiently stringent entry norms to prevent the entry of banks of questionable soundness or competence, since their proliferations could undermine public confidence of the overall integrity of the banking system,” the RBI said.


RBI is in the process of issuing new banking licenses. It has received as many as 26 applications for bank licences on the close on July 1.

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