India on Wednesday announced it was issuing two new bank licences for the first time in a decade as it accelerates a push to bring more Indians into the formal banking system. The Reserve Bank of India (RBI) announced "in-principle" approval for Mumbai-based IDFC, a major infrastructure project lender, and microfinance company Bandhan Financial Services, located in eastern India, to establish banks.
Just 35 percent of Indian adults have bank accounts, a figure which the RBI calls "miniscule" and says shows a "crying need for a further push to the financial inclusion agenda" to include India's poorest. Under their licences, the new banks must open 25 percent of their branches in rural areas that have no banking services. The two companies were chosen from among 25 applicants, including corporate heavyweights such as the telecom-to-energy ADAG Group, controlled by billionaire Anil Ambani. The central bank said IDFC and Bandhan were chosen on the basis of their 10-year business track records and their proposed business models for the banks.