RBI grants bank licences to IDFC & Bandhan Financial

The Reserve Bank allowed corporate houses to form banks
 in 2013 as part of an effort to expand access to financial services in the country.

MUMBAI: The Reserve Bank of India said on Wednesday it had granted bank licenses to IDFC Ltd and Bandhan Financial Services that would be valid for 18 months and would be subject to the two financial firms fully complying with central bank regulations. 

The central bank will also consider the application of India Post, but under a separate process to be carried out in consultation with the government. 

The RBI last year allowed corporate houses to form banks as part of an effort to expand access to financial services in the country. No new Indian bank has been formed since Yes Bank in 2004.

The Election Commission on Tuesday allowed the RBI to announce new bank licences even ahead of general elections set to conclude next month, according to a notice in the commission's website. 

The RBI had sought the commission's approval to issue new bank licences to ensure the process would not clash with the code of conduct ahead of elections, which prevents decisions that may be deemed as political from being taken by government officials or regulators. 

"The commission is of the view that Reserve Bank of India may take necessary action as deemed appropriate by the Bank," election commission said regarding the central bank's query.