The Reserve Bank of India has said that the guidelines for fresh banking licenses for new entrants would be coming in three months.

"It (framework on new banking licenses) may take three months. It all depends on what are the situations and complexities of issues," RBI deputy governor K C Chakrabarty said.

Finance Minister, Mr. Pranab Mukherjee had announced in the Union Budget that more banks are needed in the economy and fresh licenses should be given to private players and NBFCs.

"Non-banking financial companies could also be considered if they meet the RBI eligibility criteria ... We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services," he said.

The upcoming monetary policy review meeting of the RBI in April is likely to bring with it the start of the process of setting up of more private banks in the country. The framework for start of this process would be starting in April.

Speaking about LIC he said, "Till the policy is framed, we are open to everything. Once the policy is framed, we are bound by the policy."

The Finance Ministry has said that the decision to enter the banking sector by LIC would depend on the Board of Directors of LIC. LIC has a market share of over 60 per cent in the life insurance sector. It also has subsidiaries operating in housing finance and mutual funds also.