Election Commission (EC) may give nod to bank licences with riders

The Election Commission (EC) is expected to its give nod to Reserve Bank of India's request for allowing grant of new bank licences, albeit with some riders, any time soon.

After getting a clarification from the RBI, the full EC headed by chief election commissioner V S Sampath and two commissioners HS Brahma and Nasim Zaidi, deliberated on the issue on Tuesday again, but the meeting remained inconclusive.

Highly placed sources said the EC will again meet today, and in the light of RBI request not being out-rightly related to the model code of conduct, may consider it on merit but add a caveat to be safe. Sources, however, did not spell out what riders could be added by the EC.

Earlier, the EC had raised reservation on the timing of the RBI's proposal to grant new banking licence to two of the 25 probable applicants and had written to the RBI seeking further clarifications. The EC's refrain was that why did the RBI wait for so long when it could have taken a decision through established procedure during the last two years.

The RBI had sent its proposal seeking banking licences for two entities to the EC early this month maintaining that the government had already announced giving new bank licences before the notification, soon after the model code of conduct came into force on March 5.

RBI governor Raghuram Rajan had said at a press conference earlier this month that he would certainly want the EC to be okay with issuance of licences at this stage, though the process had taken place over the past year.