Govt, RBI weigh options on NBFC entry into banking

Enablers to create large global banks also part of talks

- PRASANTA SAHU

THE GOVERNMENT AND the Reserve Bank of India are looking at the entry of new banks and merging some of the existing public sector banks to create a financial system that can encourage risk-taking ability to support the pace of growth in a country that is slated to be the third largest economy by 2027-28. India hasn't issued any fresh banking licences for almost a decade.

One of the options is to encourage small finance banks and large non-banking finance companies owned by conglomerates to transition into full-fledged banks, subject to the guidelines prescribed by the central bank. In 2016, business houses were barred from applying for banking.