Priority for non bank finance cos in bank licenses: RBI deputy

Last Updated: Wed, Oct 09, 2013 10:41 hrs

India will give non-banking financial companies (NBFCs) priority when awarding new commercial banking licenses as they already own an existing network of financial services in the country, central bank deputy governor K.C. Chakrabarty said on Wednesday.

Reserve Bank of India had said in July it received 26 applications for new bank licenses, including from Tata Sons Ltd, IDFC Ltd and LIC Housing Finance Ltd.

Shares in IDFC extended gains after the comments, closing up 3.14 percent.

Chakrabarty also clarified banks were not banned from providing loans through credit cards for consumer durables goods.

The comments come after a recent RBI circular had created uncertainty by advicing banks to refrain from offering interest rate free schemes intended to allow consumers to repay credit card debt.

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