The Reserve Bank of India (RBI) nominated three members to the high level advisory committee formed to recommend granting new licenses to the private banks.

 

The committee is headed by the former RBI Governor Bimal Jalan. The RBI today finalised the names of the other members in the external committee that would seal the fate of 26 applicants willing to start private banks. The decision was taken at the RBI Board meeting held here Friday.

 

The RBI Governor, Raghuram Rajan said that the three members including RBI former Deputy Governor Usha Thorat, former SEBI Chairman Chandu Bhave and Nachiket Mor had been appointed to the committee. Rajan is hopeful that the committee will meet the deadline to submit its report.

 

“We are trying to get the report finalised by January 2014 before RBI Deputy Governor Anand Sinha retires,” Rajan said. Sinha is the in-charge of banking operations and development portfolio. He added that hopefully, the process would be completed by the time. 

 

When asked about the induction of Nachiket Mor in the committee despite he is a board member of the RBI, Rajan clarified that he (Nachiket Mor) is not an employee of the RBI. “He is only a board member and not an employee, and hence can be appointed in the expert committee,” Rajan added. 

 

The committee would act as a bridge between the RBI and the outsiders, he said.

 

The RBI Governor the fate of corporate venturing into banking business would also be decided by the expert committee. “The decision whether to allow corporate in banking would be taken after the committee submitted its recommendation on the issue,” he said. 

 

The twin swap window, which the central bank made available to banks, fetched $5.6 billion as of now. “We don’t know how much inflow can be expected before the facility closes on November 30,” Rajan said.

 

Earlier, the RBI board meeting discussed about the expansion of banking in the unbanked sector of Chhattisgarh—the state where the central bank’s board met after seven years. The last board meeting of the RBI in Raipur was held in 2006.

 

“For the e-payment, small task force will be set up in the state to suggest how bank can help the government,” Rajan said, adding that the process will start once the state government gives name for the task force. 

 

Responding to a query on a committee headed by Rajan to come out with a ‘new development index’ putting Chhattisgarh among seven other states as ‘least developed’, the RBI Governor remarked : ‘The committee was apolitical.The objective was to arrive at a conclusion using certain parameters such as low literacy, Higher Infant Mortality among others.’

The committee took the development parameter in terms of the size of SC/ST population in a State as a higher level of population in the category points towards issues of deprivation which is an issue in Chhattisgarh, he said.

The committee members not shown statistics of any state for making an analysis for making an inference. ‘We had 10 states in each pool and the bottom most was the least developed category of states, Rajan said.

To another query on the country’s growth projection of 5.5% being considered below consensus by the analysts, the RBI Governor remarked : ‘The analysis had been talking about 4.5% growth but going by the good Kharif output and a surge in exports, the growth could be much higher (Business Standard)