Banking licence applicants will have to wait: Bimal Jalan

Not one to mince words, former Reserve Bank of India (RBI) Governor Bimal Jalan spoke out succinctly on the differences between the central bank and the Finance Ministry.

"During tough times there is need for the central bank and Finance Ministry to work in harmony," he said. "Two people can differ," Jalan added, referring to the finance minister and the governor of the Reserve Bank. "But I always kept the larger picture in mind."

He was speaking at the All India Management Associations's 40th National Mangement Convention in Delhi on Thursday (September 26).

He also made it clear that private companies which had applied for banking licences should be prepared to wait awhile. Jalan heads the external committee that will screen the 26 applications.

"I cannot give a time limit, but the RBI has to scrutinize the applications and then the external committee will look into it," he said.

Some of the biggest Indian groups and entrepreneurs such as the Tatas, Anil Ambani and Kumar Mangalam Birla are among the applicants.

Refusing to be drawn into any specific comment on the RBI's current initiatives, Jalan said he had faith in the Indian economy: "Yes there is fiscal deficit and issues such as food security need to be addressed and also there is rising inflation, but I strongly believe that India is in a strong position," he said.