The discussion paper released by Reserve Bank of India on banking licenses will not be giving any clear indication on the decision to permit industrial houses and corporates to come up with banks.

The paper will however introspect into the pros and cons of the issue, said a senior government official. This is an indicative that the chances of industrial houses getting licenses have not yet been completely negated.

RBI governor Duvvuri Subbarao said that the discussion paper is most likely to come in August. The finance minister, Pranab Mukherjee had indicated during the Union Budget 2010-11 presentation that corporates should be given banking licenses so as to spread the reach of banking even further to all parts of India.

Industrial houses such as the Tatas, the Aditya Birla group and the Anil Dhirubhai Ambani group are keen to enter the banking space while many NBFCs want to be converted into banks.

"While there is a always temptation and pressure that industrial houses should be granted licences, it is a risky bet," said a top policy advisor.

"There is always this worry that who would shoulder responsibility in case something goes wrong. But there is also no clear evidence that permitting industrial houses to run banks is as such a bad idea," the adviser said.

"There has been a number of issues that has come up as to what should be the entry level capital, promoters' capital, norms for corporates and NBFCs," RBI governor Subbarao said.