Since the collapse of even one small bank can have a cascading impact on the financial sector, the number of licences which RBI grants is likely to be in single digits. This means that nearly two-thirds of the applicants, which include the Tatas, the Birlas and Anil Ambani, will be disappointed. In the past, Indian regulators have been taken to court when they did not grant a licence to an aspirant.
To avoid this Rajan, has sought to put in an airtight process by having a panel of impeccable reputation to short-list candidates and make recommendations to RBI. Rajan had named former RBI governor Bimal Jalan on September 4, the day he took charge. On Friday, h e announced the other members indicating that the work will begin in full earnest and the successful applicants are likely to be announced in January 2014, ahead of the general elections. Here is a look at the panel members and what they stand for...
Bimal JalanFormer RBI governor
Reacted to problems in NBFCs (read CRB Capital) and cooperative banks (Madhavpura Mercantile) with a crackdown that resulted in both segments playing a much diminished role by the time his term came to an end.
VIEW: "Banks and financial institutions are in a completely different category. What happens in a particular bank is a concern of all. Fear of contagion and systemic implications. Think of some recent bad cases involving banks, including co-operative banks. Relatively small, but affected a lot of institutions, including some several times larger. In India, because of the dominance of public sector institutions, investors expect more." - In a speech at Pune in January 2002 on why corporate governance in banks should be higher than in the corporate sector.
Usha Thorat
Director, Cafral and former RBI deputy governor
She headed a panel that recommended tighter prudential norms for finance companies to put them on a par with banks as part of crackdown on shadow banking. Thorat is seen as a hardliner on the role of non-banks in the financial sector.
VIEW: "Ever since the ownership and governance guidelines were issued (2005), there have been a lot of mergers in the private sector banking space. So, I guess, in some sense, one is more able to look at new licences obviously for more penetration and more competition, considering the needs of the country. So, we will keep in view the basic principles which are already there, namely diversified shareholding, and fit and proper criteria when we bring out the eligibility criteria for promoters seeking banking licence." - In an interview to a newspaper in February 2010.
Nachiket Mor
Once seen as a successor to K V Kamath in ICICI Bank
He changed tracks to move out of mainstrea m banking to focus on financial inclusion. A Ph.D in economics from the University of Pennsylvania with specialization in Finance from the Wharton School. He is a strong believer of technology in financial inclusion and was the brains behind Fino.
VIEW: "Nobody is forcing the customer to take money (from the moneylenders). She approaches a moneylender because she has no choice. If you give her choices, she will take the one that suits her best. Which is why the branch-based model is important. You need to be where the moneylenders are and compete with them in." - In a newspaper interview in July 2008
C B Bhave
Former chairman of Sebi
Got into a tiff with IRDA b y highlighting the mis-selling of unit-linked insurance plans as investment products and sought to regulate them. Stalled granting MCX permission to set up a stock exchange, resulting in the aspirant going to court. He took on the powerful mutual fund lobby by banning entry loads.
VIEW: "Whenever you regulate and when you try and tell a market that you have to be in a particular discipline, they say volumes will go down or the index will go down but I think you have to do what is right nevertheless."
via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFzq6EkADSXSILzBlQe1a1C5l5zjw&url=http://timesofindia.indiatimes.com/business/india-business/Raghuram-Rajans-team-that-will-clear-new-banks/articleshow/23544246.cms
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