Groups eyeing banking licences may have to wait a little longer

Conglomerates eyeing banking licences may have to wait a little longer. The government is of the view that corporate houses should be allowed to open new banks in the country only after the banking laws are amended to empower sector regulator, the Reserve Bank of India , to monitor the parent or subsidiary companies of a bank, said a senior finance ministry official. This follows concerns raised by the central bank that the ownership structure of large business groups may lead to a turf war among regulators if they were given licences to run banks. "There are certain amendments proposed," the official said. "We need to ensure that there is a proper monitoring mechanism in place." RBI is yet to issue the final guidelines on new bank licences. The bank had in August last year released a discussion paper on the entry of new private banks. In December, it put out the gist of the comments it received in response to the paper.